SC : Dismisses Revenue's SLP; HC held computer peripherals entitled to 60% depreciation
Birlasoft Ltd.
SC dismisses Revenue's SLP against Delhi HC judgment; HC had allowed assessee's depreciation claim @ 60 % on computer peripherals like CD writer, Printer, Network Cables, Switches.
SC dismisses Revenue's appeal against Gujarat HC judgement in the case of stock exchange; HC had upheld ITAT's order that assessee (Recognised Stock Exchange) was eligible for exemption u/s. 11/12 of the Act;
Is Tirupati Balaji liable to pay Service Tax? Supreme Court to decide
IS GOD liable to pay Service Tax for the services He provides to his pilgrims? Lord Balaji at Tirumala is perhaps the richest God on Earth providing emotional bliss to millions of devotees. TirumalaTirupatiDevasthanams (TTD), the Trust that manages the huge temple administration provides a lot of facilities to the pilgrims - of course for a charge and the Service Tax department naturally wants Service Tax on these charges.
TTD has recently challenged the provisions of the Finance Act, 1994 requiring it to pay Service Tax as violative of Constitution Articles 26 (freedom to manage religious affairs), 27 (freedom as to payment of taxes for promotion of any particular religion), and 14 (right to equality).
The petition came up for hearing before the Supreme Court on Friday. The Supreme Court issued notice to the Central Government and restrained the Service Tax authorities from coercive recovery of tax dues.
TTD had earlier challenged the imposition of Service Tax on the accommodation service provided by it, but the Andhra Pradesh High Court dismissed the writ petition [2012-TIOL-97-HC-AP-ST]. Now, the Supreme Court will decide the issue.
Is Prasad excisable ? More than twenty years ago, the CESTAT ruled, a manufactured item should have a market and it should be sold. Sale implies a bargain and there is profitability and gain attached to it. There are no religious sentiments and the item is purchased by one and all. In the light of the intendment of the legislature to impose duty on goods which are brought to the market for sale the items 'Prasad' or 'Prasadam' cannot be considered as goods. The mere entry 'Prasad' or 'Prasadam' which is purely a religious offering made to the deity cannot be brought within the ambit of the Act. The mere specification in the tariff schedule will not make the item goods and exigible; merely because the devotee has purchased it from the temple precincts it cannot be considered as an exigible commodity. The item may be goods before they are taken for presentation to the deity and at that stage the excisability of the product could be considered. The said item before presentation to the deity would not be 'Prasad' or 'Prasadam' but it would be known in the stage in which it is. Therefore, the item, after it is presented to the deity by the temple authorities and offered to devotees on charges, cannot be considered as 'goods'. The term 'goods' as has been noted in the definitions, does not carry any religious sentiments nor does it have any blessings of deity. Goods are commodities which are brought to the market for sale, while the 'Prasad' or 'Prasadam' are the blessings of a deity which has a great religious significance. Therefore, in my opinion 'Prasad' or 'Prasadam' cannot be made exigible."
For last more than 15 days NSDL 26 AS Web is not working!!!!!!
Form 26AS with respect to Tax Deducted at Source (TDS): Knowhow
Form 26AS is, in essence, an acknowledgement of sorts when it comes to Tax Deducted at Source (TDS). Which is to say that Form 26AS shows the amount of TDS, which has been deducted and is available as credit against our Income Tax liability, if any.
To understand this concept and in order to make it work in one's favour, one needs to understand the basics with respect to TDS and Form 26AS:
TDS:
1. TDS or Tax Deducted at Source refers to the deduction of Tax from the respective source of one's income. Example: Let's say that you are a Salaried employee in an organization so, subject to the applicable basic deduction/exemption limit, the organization pays Salary to you after deducting TDS from the same. Thus, Salary is your source of income and the deduction of Tax by the organization from Salary (the source of income) before paying the same to you is referred to as Tax Deducted at Source (TDS).
2. Tax is Deductible from various sources of income subject to applicable basic deduction/exemption limits. Example: Bank deducts TDS from interest (the source of income) on Fixed deposits etc.
3. Now, TDS which has been deducted by the deductor (the person responsible for making the payment, example: Bank which pays interest on Fixed deposit so Bank will be referred to as a deductor), has to be deposited in Government account on behalf of the deductee (deductee is the one who receives the income, example: the receiver of interest on Fixed deposit from Bank).
4. After depositing TDS in Government account, the deductor, files a TDS return after the end of every quarter with National Security Depositories Limited (NSDL).
5. The main purpose of filing TDS return is to inform the Government as to what all payments have been made during the quarter, to whom have the payments been made, what was the nature of payment like interest, Salary etc., PAN no. of the person to whom the payments have been made, the rate and amount of TDS deducted etc.
6. Thus, basis these returns, Government gives the credit of TDS to the respective persons on behalf of whom TDS has been deducted by the deductor.
Form 26AS:
1. Government gives the credit of TDS on the basis of TDS return and this credit gets reflected in Form 26AS. Example: Let's say that you have a Fixed deposit of Rs.10,00,000/- @8% with ICICI bank and the Bank paid the interest of Rs.18,000/- (20,000-2,000 (TDS)) for the period April to June and then in July filed the TDS return for the period April to June. Thus, after filing of TDS return by ICICI bank, a credit of Rs.2,000/- will get reflected in your respective Form 26AS because in the TDS return filed by Bank, Bank had given the details of interest payable to you i.e. Rs.20,000/-, the amount of TDS deducted from the same i.e. Rs.2,000/- , your PAN number, Name etc. Hence, on the basis of your PAN number, the Government gives the credit of Tax deducted from your income which gets reflected in Form 26AS.
2. The organization deducting TDS from your income, like ICICI bank in the aforementioned example, will issue a TDS certificate to you after filing TDS return.
3. You can compare Form 26AS with TDS certificates issued to you and if the amount of TDS deducted as per Form 26AS and as per TDS certificates is the same then it means that the Tax credit reflecting under your PAN in Form 26AS is correct. However, in case if TDS in certificates and Form 26AS does not match then you need to inform the deductor i.e. ICICI bank in the aforementioned example. The deductor will then revise the TDS return filed because such an issue of TDS credit not getting reflecting in Form 26AS occurs only when there is some error in TDS reurn filed by the deductor.
4. Most common reason due to which proper credit does not get reflected in Form 26AS is that the deductor has not quoted or has quoted incorrect PAN number (your PAN number) in TDS return.
5. Once the revised TDS return is filed by the deductor after making necessary corrections then the credit will get reflected in one's Form 26AS after sometime.
Thus, before filing the return of income one must check Form 26AS to make sure that proper TDS credit is appearing in Government records.
Please remember that irrespective of TDS certificates you have, credit of Tax shall be given on the basis of Form 26AS only. However, these days TDS certificates are being downloaded from TRACES portal, thus, chances of mismatch between TDS certfificates and Form 26AS are minimal.
Please take care that you claim TDS credit in your Income Tax Return after tallying TDS certificates received by you with Form 26AS so that you get 100% benefit of TDS deducted from your income. As, at times, it so happens that the amount of TDS credit appearing in Form 26AS is more than the amount in TDS certificates and this happens because one or some of the deductors who have deducted TDS on your behalf have not issued TDS certificate(s), for the same, to you.
By: CA Sahil Jolly , Email: casahiljolly@gmail.com
IT : Where assessee offered additional income after search operation unearthing substantial undisclosed income for earlier years, concealment penalty was to be imposed upon assessee and waiver of penalty could not be granted
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[2014] 42 taxmann.com 9 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Commissioner of Income-tax (Central), Ludhiana
v.
Bansal Abushan Bhandar*
RAJIVE BHALLA AND DR. BHARAT BHUSHAN PARSOON, JJ.
IT REFERENCE NOS. 272 TO 276 OF 1995†
OCTOBER 21, 2013
Section 271(1)(c), read with section 273A, of the Income-tax Act, 1961 - Penalty - For concealment of income [Revise return, effect of filing of] - Assessment years 1982-83 to 1986-87 - Books of account and documents, etc., seized during search from residence of partners of assessee-firm unearthed substantial undisclosed income of assessee for all assessment years - Consequently, assessee offered additional income by filing revised return - However, penalty proceedings were initiated and penalty was levied upon assessee - Whether since assessee offered said undisclosed on being cornered by department, it was a deliberate act of concealment of income by furnishing inaccurate particulars in its returns for all assessment years, and it spoke volumes of contrivance by assessee with apparent element of mens rea - Held, yes - [Para 16][In favour of revenue]
FACTS
| ■ | Books of account and documents etc., seized during search from the residence of partners of the assessee unearthed substantial undisclosed income. | |
| ■ | Consequently, the assessee filed revised returns for the years 1982-83 to 1986-87 and offered additional income. | |
| ■ | Notices under section 148 were served upon the assessee for all these assessment years and penalty proceedings were also initiated. | |
| ■ | Thereafter, penalty was levied upon the assessee. | |
| ■ | On appeal,the Commissioner (Appeals) confirmed the order of penalty holding that the assessee disclosed the additional income for these years only when cornered. | |
| ■ | However, the Tribunal had deleted the penalty. | |
| ■ | The assessee had filed also an application under section 273 before the competent authority seeking waiver of penalty on the ground that it had voluntarily offered additional amount and further that there was no detection by the revenue and, thus, no concealment could be attributed to it and plea of the assessee was not accepted; neither waiver was granted by the Central Board of Direct Taxes nor by Commissioner (Central), Ludhiana to whom application had been moved under section 273(4). | |
| ■ | On second appeal : |
HELD
| ■ | It was not an innocuous omission on the part of the assessee but was a deliberate act of concealment of income by furnishing inaccurate particulars in its returns for the assessment years 1982-83 to 1986-87. Had it been a case of single year, plea of the assessee that it was merely an omission and there was nomens rea, could possibly be considered. | |
| ■ | Furnishing of inaccurate particulars was clearly with a view to conceal income consecutively for five assessment years. It speaks volumes of contrivance by the assessee with apparent element of mens rea. [Paras 12, 13] | |
| ■ | Looking the matter from another angle, the assessee itself had filed revised returns giving fresh particulars of its income but it was only when the assessee was cornered consequent upon search and seizure proceedings and had received disturbing information of initiation of proceedings under section 148 being contemplated against it. Thus, by no means, was it a voluntary exercise of furnishing of fresh particulars by way of revised returns for all these years. [Para 14] | |
| ■ | Thus, on these facts and circumstances projected by Commissioner (Appeals), there remains no doubt that it was not only a case of furnishing of inaccurate particulars in earlier assessments but is also a case of concealment of income which thus had escaped assessment. [Para 16] | |
| ■ | Considerations for adjudication of an application/petition under section 273 for waiver of penalty and interest are that stand of the assessee should be of voluntary disclosure in good faith and that co-operation was extended by it to the income-tax authorities and further that the tax due on the basis of returned income had already been paid and it was case of genuine hardship. However, in the present case, these facts are lacking. [Para 17] | |
| ■ | It has already been noticed that surrender of additional income of Rs. 29,00 lakhs and action of filing of fresh returns by the assessee for the assessment years 1982-83 to 1986-87 was neither a voluntary affair nor was made in good faith much less by extending co-operation to the authorities. Rather, this entire exercise by the assessee was preceded by search and seizure operations resulting in seizure of books of account of the assesssee which has positively suggested concealment of income which had earlier escaped assessment. It had already been noticed in this context that proceedings for escapement, viz., under section 148 had been initiated against the assessee. Chain of events and concomitant conduct of the assessee was a clear indicator that there was complete absence of good faith and when the assessee was placed in a very tight and rather vulnerable position, only then additional income had been disclosed by him. [Para 18] | |
| ■ | The assessee had rather conducted unfairly. In short, had there been no search and consequent seizure of account books disclosing concealment of huge income, the assessee was sitting pretty since 1982 and had already got finalized its assessments for the years 1982-83 to 1986-87 clearly by furnishing inaccurate particulars and concealing correct and real income. [Para 19] | |
| ■ | Claim of the assessee that it was an honest move made by it in good faith while extending co-operation to the authorities and that it was rather a case of genuine hardship to the assessee is a farce. When faced with facts, the assessee has not been able to support and sustain this stand; conduct of the assessee rather is entirely the other way round and belies the case of claimed good faith and alleged genuine hardship. [Para 20] | |
| ■ | Consequently, notwithstanding the recommendations of the authorities below, CBDT did not fall in line with the authorities below and rejected the claim, rather advised the assessee to make a petition under section 273-A(4) to the Commissioner (Central), if there was some genuine hardship. [Para 21] | |
| ■ | Such petition was preferred by the assessee but was dismissed on 27-1-1993 by the Commissioner (Central), Ludhiana when he did not find any case of genuine hardship. | |
| ■ | In the present writ petition, no fault in order could be successfully pointed out to make out a case of genuine hardship. Squally, the writ petition having no merit, is dismissed. | |
| ■ | It is further held that the Tribunal was wrong in cancelling the penalty imposed on the assessee under section 271(1)(c). [Paras 27 & 28] |
CASE REVIEW
Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxman 218 (SC); CIT v. Anwar Ali [1970] 76 ITR 696 (SC) and Jaswant Rai v. CBDT [1998] 98 Taxman 230/231 ITR 745 (SC)distinguished.
Bansal Abhushan Bhandar v. Asstt. CIT [1995] 81 Taxman 107 (Delhi) (Mag.) (para 27) reversed.
CASES REFERRED TO
Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxman 218 (SC) (para 13), CIT v. Anwar Ali[1970] 76 ITR 696 (SC) (para 14), CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC) (para 16) and Jaswant Rai v. CBDT [1998] 98 Taxman 230/231 ITR 745 (SC) (para 24).
Rajesh Sethi for the Appellant. Akshay Jindal for the Respondent.
ORDER
Bharat Bhushan Parsoon , J. - By way of this order, we shall decide ITR Nos.272 to 276 of 1995 and CWP No.1856 of 1993.
1. In a consolidated order dated 14.5.1993 passed in ITA Nos.9434 to 9438/Del/90 in respect of assessment years 1982-83 to 1986-87, following question of law had been referred for opinion of this Court by the Income Tax Appellate Tribunal, Delhi Bench-B, New Delhi:—
"Whether the Tribunal was right in cancelling the penalty imposed u/s 271(1) of the Income Tax Act, 1961?"
2. Taking stock of facts as also of circumstances of this case in the interface of law on the point, this Court had answered this question in favour of the revenue and against the assessee. It was on 6.11.2006 that a review petition qua this order was preferred by the assessee on 27.9.2007, which, after providing hearing to counsel for the applicant-assessee was dismissed by this Court on 12.10.2007. The assessee had challenged order dated 6.11.2006 by way of Special Leave to Appeal in the Hon'ble Supreme Court of India. Accepting the plea of the assessee that the impugned order of this Court had been delivered ex-parte but without expressing its opinion on merits of the case, liberty was granted to move this Court to put-forth its case. Thus, by setting aside the impugned ex-parte order, SLP was dismissed.
3. After receipt of the order of Hon'ble Supreme Court of India on 27.3.2009, order dated 6.11.2006 was passed in CM Nos.2986, 2989, 2992, 2995 and 2998 of 2009, Income Tax References were restored to their original number and were ordered to be listed before an appropriate Bench. It is in this backdrop that these references are before us for answering the question referred to this Court by the Tribunal.
4. It may be noticed further that in addition to challenging the order of penalty inter-alia under Section 271(1) of the Income Tax Act, 1961 (for short, the Act) before the appellate authority, the assessee on his part had started proceedings for waiver of the penalty imposed for the assessment years 1982-83 to 1986-87. Recommendation of the income tax authorities had not found favour with the Central Board of Direct Taxes and consequently the penalty was not waived.
5. Rather on 20.9.1991, CBDT vide letter Annexure P-10, informed the petitioner to make a petition under Section 273 (4) of the Act before the Commissioner of Income Tax (Central), Ludhiana, Punjab if there are circumstances amounting to genuine hardship. Sequelly, the assessee had moved the competent authority for waiver of penalty and interest on the ground of genuine hardship vide a petition made on 11.10.1991 (Annexure P-11). Plea of the assessee was not accepted.
6. Dissatisfied with the verdict of CBDT and CIT, Central, Ludhiana against it, the assessee had filed Civil Writ Petition (No.1856 of 1993), which, vide order dated 21.3.1994, was directed to be heard along with these references. The writ petition of the assessee is also being taken up for adjudication along with these references.
7. Before proceeding to answer the question of law, it would be appropriate to narrate the facts of the case as also the circumstances in which this question arose before the Tribunal.
More facts follow:
8. The assessee firm was being assessed to income tax. Premises of father of the partners of the assessee firm were raided on 16.7.1987 and account books pertaining to transactions for the period ranging from 1978 to 1987 were seized. In September 1987, the assessee approached the Commissioner of Income Tax, Rohtak with a proposal of settlement offering additional income of Rs.29 lacs for the assessment years 1982-83 to 1986-87.
However, when the assessee got information that the Department was issuing notices under Section 148 of the Act, the assessee worked overtime and filed revised returns for the year 1982-83 to 1986-87. Notices under Section 148 of the Act, however, was served upon the assessee for all these assessment years. The notices had also been issued for initiation of penalty proceedings.
9. The assessee had filed an application under Section 273 of the Act before the competent authority seeking waiver of penalty on the ground that it had voluntarily offered additional amount and further that there was no detection by the revenue and, thus, no concealment could be attributed to it. Notwithstanding the case of the assessee having been recommended by the authorities below, plea of the assessee was not accepted; neither waiver was granted by the Central Board of Direct Taxes nor by CIT (Central), Ludhiana to whom application had been moved under Section 273(4) of the Act.
10. Contention of the assessee before this Court is that disclosure had been made by it voluntarily and there was no detection by the revenue. It is claimed that such disclosure should not have automatically resulted into initiation of proceedings under Section 148 of the Act, resulting in revised assessment and consequent imposition of penalty inter-alia under Section 271(1)(c) of the Act.
11. Plea of the revenue on the contrary is that exercise of power under Section 271(1)(c) of the Act is statutory in nature and income of the assessee having escaped assessment due to concealment and furnishing of inaccurate particulars in its returns by the assessee, such power had rightly been exercised by the Assessing Officer. Recommendations of the Tribunal were challenged.
12. When rival contentions of the parties are evaluated, it becomes clear that it was not an innocuous omission on the part of the assessee but was a deliberate act of concealment of income by furnishing inaccurate particulars in its returns for the assessment years 1982-83 to 1986-87. Had it been a case of single year, plea of the assessee that it was merely an omission and there was no mens-rea, could possibly be considered.
13. Furnishing of inaccurate particulars was clearly with a view to conceal income consecutively for five assessment years. It speaks volumes of contrivance by the assessee with apparent element of mens-rea. Thus authority cited by the assessee, reported as Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxman 218 (SC), wherein it was held that for imposition of penalty, an element of mens-rea is needed, does not support the case of the assessee.
14. Looking the matter from another angle, the assessee itself had filed revised returns giving fresh particulars of its income but it was only when the assessee was cornered consequent upon search and seizure proceedings and had received disturbing information of initiation of proceedings under Section 148 of the Act being contemplated against it. Thus, by no means, was it a voluntary exercise of furnishing of fresh particulars by way of revised returns for all these years. When there is no explanation offered by the assessee for having furnished inaccurate particulars of its income (in original assessment framed against it) resulting in concealment of income which had escaped assessment, authority cited by the assessee as CIT v. Anwar Ali[1970] 76 ITR 696 (SC), holding that there should be sufficiency of grounds for rejection of assessee's explanation as false in assessment proceedings, does not come to the rescue of the assessee.
15. At this stage, it is relevant to take note of the findings recorded by Commissioner of Income Tax (Appeals) on facts of the present case, as below:—
"... In view of these facts, I am of the view that the appellant disclosed the additional income for these years only when concerned (cornered). Books of account and documents etc. seized during search u/s 132 of Income Tax Act, 1961, from the joint residence of the partners of the appellant firm and their father, showed substantial undisclosed income. As mentioned in paras 2 & 3 above, the appellant was able to satisfy the learned Assessing Officer that these accounts/documents belonged to the appellant firm. There was thus no way that the appellant or its partners could escape the additional tax liability and other consequences of not disclosing substantial income for those years in the returns of income originally filed and on the basis of which assessments already stood completed. The additional income disclosed by the appellant in the returns of income filed on 4.1.88 cannot therefore, be said to be a disclosure made voluntarily or bona fide."
16. Thus, on these facts and circumstances projected by Commissioner of Income Tax (Appeals), there remains no doubt that it was not only a case of furnishing of inaccurate particulars in earlier assessments but is also a case of concealment of income which thus had escaped assessment. Sequelly, even when strict compliance in terms of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC) sought by the assessee is made of the provisions of Section 271(1)(c) of the Act, it is clearly a case of concealment of income and by no means can be said to be a disclosure made voluntarily or bona fide.
17. Considerations for adjudication of an application/petition under Section 273 of the Act for waiver of penalty and interest are that stand of the assessee should be of voluntary disclosure in good faith and that cooperation was extended by it to the income tax authorities and further that the tax due on the basis of returned income had already been paid and it was case of genuine hardship. However, in the present case, these facts are lacking.
18. It has already been noticed that surrender of additional income of Rs.29.00 lacs and action of filing of fresh returns by the assessee for the assessment years 1982-83 to 1986-87 was neither a voluntary affair nor was made in good faith much less by extending cooperation to the authorities. Rather, this entire exercise by the assessee was preceded by search and seizure operations resulting in seizure of books of account of the assessee which had positively suggested concealment of income which had earlier escaped assessment. It has already been noticed in this context that proceedings for escapement, viz, under Section 148 of the Act had been initiated against the assessee. Chain of events and concomitant conduct of the assessee is a clear indicator that there was complete absence of good faith and when the the assessee was placed in a very tight and rather vulnerable position, only then additional income had been disclosed. By him.
19. The assessee had rather conducted unfairly. In short, had there been no search and consequent seizure of account books disclosing concealment of huge income, the assessee was sitting pretty since 1982 and had already got finalized its assessments for the year 1982-83 to 1986-87 clearly by furnishing inaccurate particulars and concealing correct and real income.
20. Claim of the assessee that it was an honest move made by it in good faith while extending cooperation to the authorities and that it was rather a case of genuine hardship to the assessee is a farce. When faced with facts, the assessee has not been able to support and sustain this stand; conduct of the assessee rather is entirely the other way round and belies the case of claimed good faith and alleged genuine hardship.
21. Consequently, notwithstanding the recommendations (Annexure R-1) of the authorities below, CBDT did not fall in line with the authorities below and rejecting the claim, rather advised the assessee to make a petition under Section 273-A(4) of the Act to the Commissioner of Income Tax (Central), Ludhiana if there was some genuine hardship.
22. As has already been noticed, such petition was preferred by the assessee but was dismissed on 27.1.1993 by the Commissioner of Income Tax (Central), Ludhiana when he did not find any case of genuine hardship. Giving excrepts of assets of the firm as also of the partners as on 31.3.1992, the Commissioner of Income Tax (Central), Ludhiana had come to a conclusion that total wealth of the firm and partners as on 31.3.1992 was Rs.42,96,455 (Annexure P-16).
23. Following observation made by the Commissioner of Income Tax (Central), Ludhiana in order dated 27.1.1993 may be noticed:—
"As regards the petition of the assessee under sub-section (4) of Section 273A, merely because the assessee has to pay taxes of Rs.28,56,089/- against the income surrendered at Rs.29 lakhs, it does not become case of genuine hardship as stipulated under sub section (4). Similarly, the facts that the assessee devoted time, incurred expenses and suffered hazards of travelling etc. do not make a case of genuine hardship. As regards the good faith of the assessee and alleged assurance from the CIT, Haryana, Rohtak, the same have already been dealt with above. Genuine hardship means the real hardness of fate or circumstances or real severe suffering or privation. There is no such factor or circumstances in this case. Further, factors like nature of default or lapse, financial condition of the assessee etc. are also germane to the determination of such a question. Further it has also to be seen whether having regard to the quantum of penalty and the financial condition of the assessee, recovery of the penalty would spell ruination to the business of the assessee. The default or lapse is quite serious as concealment of particulars of income was discovered by seizure of books of accounts of assessee by the Department. The assessee has not been able to show that the recovery of penalties imposed would spell ruination to the business of the assessee or would cause genuine hardship to him, keeping in view the above criteria.
The financial position of the assessee and partners is very sound. The firm and partners have sufficient assets detailed below from which the assessee can easily pay the penalties and such payments would definitely not cause ruination to the assessee's business.
| ** | ** | ** |
It will be seen from the above that the total assets of the firm and partners are Rs.42,96,455/-. Out of this, the value of immovable assets is only Rs.7,62, 250/-. As against this, penalties payable u/s 271(1) are only Rs.7,43,300/-. The firm and partners are severally and jointly responsible for payment of taxes etc. due from the firm. The firm and partners have sufficient funds from the firm. The firm and partners have sufficient funds from which they can pay the penalty demand of Rs.7,43,300/-. The payment of penalties will, thus not spell ruination to the assessee's business and will not cause any genuine hardship to the assessee."
24. Sequelly, the petition of the assessee under Section 273-A(4) of the Act was dismissed. Learned counsel for the assessee seeking support from Jaswant Rai v. CBDT [1998] 98 Taxman 230/231 ITR 745 (SC), has urged that it is entitled to benefit of Section 271(4-A) of the Act as it exhausted remedy for waiver of penalty. Reference in this regard has been made to para 6 of the judgment, which, for ready reference, is reproduced as below:—
"6. A reading of the provisions of Section 274(4-A) [after deletion of the said provisions by Taxation Laws (Amendment) Act, 1975, with effect from 1-10-1975 such power is now conferred upon the Commissioner under Section 273-A of the Act] will indicate that it is a power coupled with a duty to do justice and the Commissioner is under statutory obligation to exercise the power in favour of an assessee which has fulfilled all the conditions of the provisions. In deciding such a matter, therefore, he cannot take into account factors or reasons which are invalid or extraneous to the said provisions. The principal condition for grant of relief under the said provision is that the assessee should have voluntarily and in good faith made full disclosure of his income prior to the detection of the same and such disclosure could be made even otherwise than in the course of a return by submitting a petition to the Commissioner. In the present case, we have already noticed that the assessee had made the disclosure prior to the coming into force of the voluntary disclosure scheme and long before the Department could initiate any action in respect of the concealed income. The levy of penalty under Section 271(1)(c) by itself will not be a circumstance to take him out of the purview of Section 271(4-A) of the Act."
25. In the said authority, it was a case of voluntary disclosure scheme and the assessee had made the disclosure prior to the coming into force of the said scheme and long before the Department could initiate any coercive action in respect of the concealed income of the assessee. However, the facts of the case in hand are entirely different as it is not a case of voluntary disclosure scheme; rather, it is a case of search and seizure and as a sequel thereto, accounts were sealed and large scale concealment of income was detected.
26. Circumstances in which revised returns for five years were submitted, when notice under Section 148 of the Act had been issued to the assessee etc., have been dealt with in detail in earlier part of the judgment. Consequently, the authority cited by the petitioner does not come to the rescue of the petitioner.
27. In the present writ petition, no fault in order Annexure P-16 could be successfully pointed out to make out a case of genuine hardship. Sequelly, the writ petition having no merit, is dismissed.
28. It is further held that the Tribunal was wrong in cancelling the penalty imposed on the assessee under Section 271(1)(c) of the Income Tax Act, 1961.
29. Thus, the references on their own merits and circumstances are answered in favour of the revenue and against the assessee.
POOJA †Arising out of order of Tribunal in Bansal Abhushan Bhandar v. Asstt. CIT [1995] 81 Taxman 107 (Delhi)(Mag.).
IT : PPF account is immune from attachment and sale for recovery of income-tax dues
• Rule 10 of the Second Schedule to the Income-Tax Act,1961 provides that All such property as is by the Code of Civil Procedure, 1908, exempt from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule. Proviso to section 60(1) of Code of Civil Procedure contains list of properties which shall not be liable to attachment or sale which inter alia covers in clause (ka) "(ka) all deposits and other sums in or derived from any fund to which the Public Provident Fund Act, 1968 (23 of 1968), for the time being applies, in so far as they are declared by the said Act as not to be liable to attachment."
• Therefore, any amount lying in the PPF account of a subscriber is immune from attachment and sale for recovery of the income tax dues. As long as an amount remains invested in a PPF account of an individual, the same would be immune from attachment from recovery of the tax dues. The situation may change as and when such amount is withdrawn and paid over to the subscriber. CBDT circular dated 7-11-1990 clarifying that "Section 9 of the Public Provident Fund applies only to attachment under a decree/order of a Court of Law and not to attachment by the Income Tax Authorities" is contrary to the above statutory provisions.
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[2014] 42 taxmann.com 300 (Gujarat)
HIGH COURT OF GUJARAT
Dineshchandra Bhailalbhai Gandhi
v.
Tax Recovery Officer
AKIL KURESHI AND MS. SONIA GOKANI, JJ.
SPECIAL CIVIL APPLICATION NO. 11575 OF 2005
FEBRUARY 12, 2014
J.P. Shah and Manish J. Shah for the Petitioner. Sudhir M. Mehta for the Respondent.
JUDGMENT
Akil Kureshi, J. - Petitioner has challenged action of the respondent in attaching and recovering an amount of Rs. 9,05,000/= from the Public Provident Fund account ["PPF account" for short] of the petitioner. Brief facts are as under :—
The petitioner is assessed as an individual by the Income-tax Department. On 5th August 1992, the petitioner had opened a PPF account with State Bank of India, Salabatpura Branch, Surat under the Public Provident Fund Scheme, 1968 ["the Scheme" for short]. From time to time, the petitioner went on depositing various amounts in the said account. As on 29th October 2004, there was a sum of Rs. 9,06,466.01p. accumulated in the PPF account of the petitioner.
2. The respondent-Tax Recovery Officer, Surat issued a notice dated 25th February 2005 under section 226(3) of the Income-tax Act, 1961 ("Act" for short) to the Branch Manager of Salabatpur Branch of the State Bank of India stating that a sum of Rs. 25,16,790/= is due from the petitioner to the Income-tax Department. His PPF account is therefore attached under section 226 (3) of the Act and the amount lying in the said account may be remitted to the Tax Recovery Officer.
3. On 17th March 2005, the Branch Manager, State Bank of India wrote to the petitioner informing him that he had received the order from the Tax Recovery Officer under which a lien had been created on his PPF account and therefore, no withdrawal or loans would be permitted against the balance in the said account.
4. The case of the petitioner is that the order of assessment giving rise to the income-tax dues of the petitioner was under challenge before the Appellate Commissioner. Pending such appeal, the petitioner had deposited substantial amount of taxes and that therefore, the rest of the demand would be stayed. According to the petitioner, his outstanding dues even pending appeal were only Rs. 5,06,142/=. Despite this, the respondent recovered a sum of Rs. 9,05,000/= unilaterally from the PPF account of the petitioner. The petitioner has, therefore, challenged the said action of the respondent.
5. Counsel for the petitioner placed heavy reliance on Section 9 of the Public Provident Fund Act, 1968 ["PPF Act" for short] to contend that the amount outstanding in the petitioner's PPF account cannot be attached for recovery of his tax dues. He also relied on Rule 10 of Schedule-II to the Income-tax Act, 1961 in this respect. Our attention was drawn to Section 60 of the Civil Procedure Code to contend that the amount in the PPF account cannot be attached.
6. On the other hand, learned counsel Shri Sudhir Mehta for the Department opposed the petition contending that Section 9 of the PPF Act only pertains to the attachment under any decree or order of the Court in respect of any debt or liability incurred by the subscriber and has no reference to his income-tax dues. He relied on CBDT circular dated 7th November 1990 in which it is clarified as under :—
"It has been clarified by the C.B.D.T and the Ministry of Law that Section 9 of the Public Provident Fund applies only to attachment under a decree/order of a Court of Law and not to attachment by the Income Tax Authorities. In view of this clarification, the amount standing to the credit of subscriber in PPF Account shall be liable to attachment under any order of income tax authorities in respect of debt or liability incurred by the subscriber."
7. Under an interim order dated 2nd August 2005, this Court directed the respondent to deposit the sum of Rs. 9,05,000/= in the PPF account of the petitioner, however, upon a stipulation that such amount shall be attached in favour of the respondent till final disposal of the petition.
8. The Scheme is framed under the Public Provident Fund Act, 1968. The statement of objects and reasons for enactment of the Act state inter alia that the object of the bill is to provide for the institution of a Provident Fund for general public. The fund is meant to be a medium for long term savings for individuals. With such object in mind, the Public Provident Fund Act was enacted. Section 3 of the PPF Act, 1968 provides for framing of the Public Provident Fund Scheme. Sub-section (1) of Section 3 provides that the Central Government may, by a notification in the official Gazette, frame a scheme to be called the Public Provident Fund Scheme for the establishment of a provident fund for the general public and there shall be established, as soon as may be after the framing of the Scheme, a Fund in accordance with the provisions of this Act and the Scheme.
9. Section 4 of the PPF Act, 1968 provides that any individual may, on his own behalf or on behalf of a minor, of whom he is the guardian, subscribe to the Fund in such manner and subject to such maximum and minimum limits as may be prescribed in the Scheme. Section 5 pertains to interest to be paid on such subscriptions. Section 6 pertains to withdrawals which may be permitted to the extend and subject to terms and conditions as may be specified. Section 9, which is important for us, reads as under :—
"9. Protection against attachment - The amount standing to the credit of any subscriber in the Fund shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the subscriber."
10. From the provisions of the PPF Act, 1968 it can be seen that the same is a benevolent statute and envisages creation of an institution of the Provident Fund for the general public, for the purpose of a medium for long term savings for individuals. The Act envisages framing up of a Public Provident Fund Scheme and creation of a fund in accordance with the provisions of the Act and the Scheme. The Act contains provisions for the subscription to the fund and interest to be paid on the subscriptions. It also controls the withdrawals and granting of loan against the amount standing to the credit of a subscriber in the Fund. Section 9 of the PPF Act, therefore, has to be seen in the background of such benevolent provisions. The provision of the PPF Act, 1968 seen in light of the PPF Scheme would demonstrate that the withdrawals and loans against the amount lying in the account of a subscriber are controlled thereby encouraging long term savings for an individual and discouraging withdrawals intermittently and pre-maturely. It can thus be seen that the PPF Scheme which covers all individuals whether employed in the public sector or not or covered under the labour welfare legislations or not. In essence, therefore, even for individuals not covered by the public employment and therefore enjoying contributory provident fund or pension scheme or organized sector, and therefore, covered under the labour welfare schemes, provides for a social security and a fund to depend upon in old age; post-retirement.
11. In case of Union of India v. Radha Kissen Agarwalla & Anr., AIR 1969 SC 762, in the context of Railway Provident Fund created under the Provident Funds Act, 1925, the Apex Court observed that the Union of India was a trustee for the subscriber of the money. When the amount lying with the Reserve Bank as an agent of the Railway administration was attached, the Union had clearly an interest to maintain the application for removal of the attachment. With such observation, the order of attachment of the amount by the Railway Administration was held to be contrary to Section 3 of the PPF Act, 1925. We may refer to Section 3 (1) of the PPF Act, 1925 which provides, inter alia, that, "..A compulsory deposit in any Government or Railway Provident Fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Civil, Revenue or Criminal Court in respect of any debt or liability incurred by the subscriber or depositor, and neither the Official Assignee nor any receiver appointed under the Provincial Insolvency Act, 1920, shall be entitled to, or have any claim on, any such compulsory deposit."
12. The decision in case of Union of India v. Radha Kissen Agarwalla & Anr. (Supra) was reiterated in case of Union of India v. Jyoti Chit Fund and Finance & Ors., reported in AIR 1976 SC 1163. Here also, the Court was considering Section 3 of the PPF Act, 1925. Referring to clause (k) of Section 60 of the Code of Civil Procedure, the Court observed that so long as the amounts are provident fund dues, pensions and other compulsory deposits then, till they are actually paid to the government servant who is entitled to it on retirement or otherwise, the nature of the dues is not altered. The government is a trustee for those sums and has an interest in maintaining the objection in court to attachment.
13. At this stage, we may refer to Rule 10 of Schedule-II to the Income-tax Act, 1961. The second schedule pertains to procedure for recovery of tax. Rules contained in the schedule make detailed provisions and the manner in which tax dues of the department could be recovered from the debtors. Rule 10 thereof reads as under :—
"10. Property exempt from attachment :
| (1) | All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), shall be exempt from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule. | |
| (2) | The Tax Recovery Officer's decision as to what property is so entitled to exemption shall be conclusive." |
14. From the said rule, it could be seen that all such property as is by the Code of Civil Procedure exempted from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under the said schedule also.
15. In turn, if one peruses Section 60 of the Code of Civil Procedure, it pertains to property liable to attachment and sale in execution of decree. Sub-section (1) of Section 60 lists the properties which shall be liable to attachment or sale. Proviso to section 60(1) contains list of properties which shall not be liable to attachment or sale. Clause (ka) thereof reads as under :—
"(ka) all deposits and other sums in or derived from any fund to which the Public Provident Fund Act, 1968 (23 of 1968), for the time being applies, in so far as they are declared by the said Act as not to be liable to attachment."
16. To our mind, three provisions noted above, namely, Section 9 of the PPF Act, 1968 Rule 10 of Schedule-II to the Income-tax Act, 1961 and clause (ka) to the proviso to Section 60(1) of the Code of Civil Procedure complete a full circuit, making any amount lying in the public provident fund of a subscriber immune from attachment and sale for recovery of the income tax dues. We may recall that Rule 10 of Schedule-II to the Income-tax Act, 1961 exempts all such properties as by the Civil Procedure Code are exempted from attachment and sale in execution of a decree of a civil court from attachment and sale under the said schedule. In turn, clause (ka) of the provision to Section 60 (1) of the Code of Civil Procedure provides that all deposits and other sums in or derived from any fund to which the Public Provident Fund Act, 1968 applies in so far as they are declaring by the said Act not to be liable to attachment, shall not be liable for attachment or sale under the Code. This brings us right back to Section 9 of the PPF Act, 1968 which provides that the amount standing to the credit of any subscriber shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the subscriber.
17. In case of Union of India v. Smt. Hira Devi & Anr., reported in AIR 1952 SC 227, the Apex Court held and observed that the compulsory deposit made in the Provident Fund under Section 2 (1) of the Provident Fund Act, 1925 is not liable to attachment. It was observed that the prohibition against the assignment or the attachment of such compulsory deposits is based on grounds of public policy.
18. Considering the benevolent provisions of the PPF Act, 1968 and taking harmonious construction of the relevant provisions of the PPF Act read with the provisions of the Civil Procedure Code and the provisions contained in the Income-tax Act, 1961 for recovery of the tax dues, it clearly emerges that as long as an amount remains invested in a PPF account of an individual, the same would be immune from attachment from recovery of the tax dues. The situation may change as and when such amount is withdrawn and paid over to the subscriber, which is not the situation in the present case. In our opinion, the clarification issued by the CBDT does not take into account the provisions of Rule 10 of the Second Schedule to the Income-tax Act, 1961 and the provisions of Section 60(1) of the Code of Civil Procedure. The said clarification is contrary to such statutory provisions.
19. In the result, writ petition is allowed. Action of the respondent in first attaching and thereafter unilaterally withdrawing a sum of Rs. 9,05,000/= from the PPF account of the petitioner is quashed. Rule is made absolute.
IT: Where amount received by assessee by way of demand draft was invested by a company whose existence was not established by assessee, amount was rightly added as cash credit
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[2014] 41 taxmann.com 541 (Andhra Pradesh)
HIGH COURT OF ANDHRA PRADESH
Sri Chakra Cements Ltd.
v.
Income-tax Officer, Ward-3(1), Hyderabad*
V. ESWARAIAH AND K.G. SHANKAR, JJ.
ITTA NO. 110 OF 2012
APRIL 13, 2012
Section 68 of the Income-tax Act, 1961 - Cash credits [Burden of proof] - Assessment year 1996-97 - Whether under section 68, mere furnishing of name of creditor and particulars of demand draft through which amount was received is a sufficient explanation about nature and source of investment - Held, no - Whether where amount received by assessee by way of demand draft was invested by a company whose existence was not established by assessee, amount was rightly added as cash credit as assessee failed to discharge burden in explaining said investment - Held, yes [Para 8] [In favour of revenue]
FACTS
| ■ | The Assessing Officer added Rs. 50 lakhs to income of the assessee as cash credits on the ground that the amount received by way of demand draft was said to have been received by a company 'G' towards inter corporate deposit payable on demand, but the assessee could not produce any information about the whereabouts of the said company. | |
| ■ | The Commissioner (Appeals) held that the assessee merely stated that the creditor was a limited company and assessed to tax but no evidence was furnished like profit and loss account, balance sheet or evidence regarding creditworthiness of the creditor. Merely because the amount was received by way of demand draft, it could not be said that the said amount was not a cash credit as the existence of the creditor itself was not established. Accordingly, he upheld the addition made by the Assessing Officer. | |
| ■ | The Tribunal also confirmed the addition made by the lower authorities. |
HELD
| ■ | Admittedly the assessee failed to prove the identity of the party and the genuineness of the transaction and, therefore, the Assessing Officer, the Appellate Commissioner as well as the Tribunal rightly sustained the addition under section 68. | |
| ■ | The assessee has failed to discharge the primary onus cast on it by section 68 and it cannot be said that a duty is cast on the Assessing Officer to make further enquiry, especially when the assessee has failed to discharge his initial burden. [Para 8] | |
| ■ | When the existence of the investor-company itself is not established, merely because the entry was entered in the books of account as if the amount was received by demand draft, it cannot be said that the assessee has no legal obligation to explain the nature and source of the credit. | |
| ■ | He failed to tender any evidence regarding the said cash credit and, therefore, the Assessing Officer is justified in rejecting the claim of the assessee as he has failed to discharge the burden in explaining the said investment. | |
| ■ | Further, mere furnishing of the particulars of the investor is not enough and payment of the said amount by way of demand draft is not sacrosanct nor can it make a non-genuine transaction as genuine. | |
| ■ | The onus is on the assessee to offer explanation as to the nature and source of the said credit and he has failed to establish the identity of the creditor and, therefore, the Tribunal rightly dismissed the appeal. [Para 9] | |
| ■ | Under section 68, mere furnishing of the name of the creditor and the particulars of the demand draft through which the said amount was received is not a sufficient explanation about the nature and source of the said amount and therefore the assessee has failed to explain the cash credit and which was rightly charged to income tax as income of the assessee. [Para 10] | |
| ■ | The Tribunal rightly rejected the contention of the assessee that the Assessing Officer ought to have conducted a further probe by issuing a notice or summons in examining the creditor. | |
| ■ | When the existence of the creditor itself was not established by the assessee and when he has failed to discharge the primary burden, which lies on him, the question of conducting further enquiry or probe does not arise. | |
| ■ | Therefore, there is no substantial questions of law arising for consideration to admit the appeal. [Para 11] |
JUDGMENT
V. Eswaraiah, J. - This Appeal, under Section 260A of the Income Tax, 1961 (for short 'the Act') arising out of the assessment year 1996-97, is sought to be filed alleging that the following are the substantial questions of law that arise for consideration:
| "1. | Whether on the facts and circumstances of the case, the Hon'ble Tribunal is right in upholding the order of the Commissioner of Income Tax (Appeals) who sustained an addition of Rs.50 lakhs under Section 68 of the Income Tax Act, 1961 on the ground that the appellant has failed to prove the identity of the party and the genuineness of the transaction? | |
| 2. | Whether on the facts and circumstances of the case, it could be concluded that the appellant has not discharged the primary onus cast on it by section 68 of the Act and no duty is cast on the assessing office to make further enquiries specially in the absence of any finding that the investor company was a mere name lender?" |
2. The facts of the case are that the appellant is a company carrying on the manufacture of sale of cement. The appellant filed a return of income on 29.11.1996 admitting "Nil" income after setting off of brought forward losses. The Assessing Officer originally completed the assessment on 30.3.1999 under Section 143 (3) of the Act and determined the total income at Rs. 3,96,59,292/-. Therefrom, the Assessing Officer reduced the unabsorbed depreciation of a similar amount. While determining the said income, the Assessing Officer added the increase in the share capital of Rs. 3,19,50,000/-. The appellant filed an appeal before the Commissioner of Income Tax (Appeals), who set aside the assessment and remanded the matter to the Assessing Officer. The Assessing Officer completed the re-assessment on 28.10.2002 under Section 143 (3) r/w Section 251 of the Act.
3. It is stated that on remand, the appellant was addressed various letters for furnishing the information about the investment and in response to the letters and notices issued to the Chartered Accountant and also to the Manager (Accounts) of the appellant, they appeared and furnished the details with regard to Rs. 3,19,50,000/- of the share capital. The appellant was able to furnish the material about the investment in share capital through Demand Drafts, which were reflected in the books of accounts of the respective companies as well as the individuals, which were routed through official channels and accordingly the relief was granted to the appellant for investment of the share capital of Rs. 2,69,50,000/-, but insofar as Rs. 50,00,000/- is concerned, it was added as cash credit of the appellant on the ground that the investment of Rs. 50,00,000/- is said to have been invested by Gold Crest Finance (India) Limited. With regard to the said investment by Gold Crest Finance (India) Limited, the appellant could not produce any information about the whereabouts of the said company in spite of addressing letters on 23.9.2002.
4. In computing the said income of Rs. 50 lakhs of the appellant, the appellant filed an appeal before the Commissioner of Income Tax (Appeals) IV, Hyderabad, who by order dated 5.1.2004 held that the amount of Rs. 50 lakhs by Demand Drafts said to have been received by the Gold Crest Finance (India) Limited towards inter corporate deposit payable on demand was not able to be established. It is stated that the said Rs. 50 lakhs was said to have been received as inter corporate deposit payable on demand but not towards the share capital. The Commissioner also stated that the appellant also admitted that the whereabouts of the said investor M/s Gold Crest Finance (India) Limited, are not known and the identity of the creditor has not been established by the appellant. The creditworthiness itself is not established. The appellant merely states that creditor is a limited company and assessed to tax but no evidence is furnished like P & L Account, balance sheet or evidence regarding creditworthiness of the creditor. Merely because the amount was received by way of Demand Draft through the banking channels, it cannot be said that the said amount is not a cash credit as the existence of the creditor itself is not established. Admittedly, the onus is on the appellant to prove the genuineness of the said transaction. The appellant has failed to establish the identity of the creditor and, it's creditworthiness as well as the genuineness of the transaction.
5. Accordingly, the Commissioner of Income Tax dismissed the appeal holding that the Assessing Officer correctly added Rs.50 lakhs as unexplained credit under Section 68 of the Act.
6. As against the said order, the appellant filed ITA No.181/Hyd/2004, on the file of the Income Tax Appellate Tribunal, Hyderabad, and the Tribunal by the impugned order dated 28.6.2006, dismissed the appeal.
7. After going through the facts and circumstances of the case, it is to be seen as to whether the questions raised by the appellant before this Court are the substantial questions of law that arise for consideration or not?
8. We are of the opinion that insofar as the first question is concerned, we do not see any substantial question of law arising for consideration as admittedly the appellant failed to prove the identity of the party and the genuineness of the transaction and therefore the Assessing Officer, the Appellate Commissioner as well as the Income Tax Appellate Tribunal rightly sustained the addition of Rs. 50 lakhs under Section 68 of the Act. Insofar as the second question is concerned, we are of the opinion that the appellant has failed to discharge the primary onus cast on it by Section 68 of the Act and it cannot be said that a duty is cast on the Assessing Officer to make further enquiry, especially when the appellant has failed to discharge his initial burden.
9. This Court is also of the opinion that when the existence of the investor-company itself is established, merely because the entry was entered in the books of accounts as if the amount was received by demand draft, it cannot be said that the appellant has no legal obligation to explain the nature and source of the credit. He failed to tender any evidence regarding the said cash credit and therefore the Assessing Officer is justified in rejecting the claim of the appellant as he has failed to discharge the burden in explaining the said investment. Further, mere furnishing of the particulars of the investor is not enough and payment of the said amount by way of demand draft is not sacrosanct nor can it make a non-genuine transaction as genuine. The onus is on the appellant to offer explanation as to the nature and source of the said credit and he has failed to establish the identify of the creditor and therefore we are of the opinion that the Tribunal rightly dismissed the appeal.
10. Under Section 68 of the Act, mere furnishing of the name of the creditor and the particulars of the demand draft to which the said amount of Rs. 50 lakhs was received is not a sufficient explanation about the nature and source of the said Rs. 50 lakhs and therefore the appellant has failed to explain the cash credit of Rs. 50 lakhs and which was rightly charged to income tax as income of the assessee. The said investment of Rs. 50 lakhs is rightly added as income of the previous years.
11. In our opinion, the Tribunal rightly rejected the contention of the appellant with regard to the contentions that the Assessing Officer ought to have conducted a further probe by issuing a notice or summons in examining the creditor. When the existence of the creditor itself was not established by the appellant and when he has failed to discharge the primary burden, which lies on him, the question of conducting further enquiry or probe does not arise. Therefore, we do not see any substantial questions of law arising for consideration to admit the appeal.
12. The appeal is accordingly dismissed. No order as to costs. As the appeal is dismissed, miscellaneous petitions shall stand closed.
LATAIncome Tax
Whether a cricketer who plays for India, is also professional actor if he acts in TV Commercials and is entitled to Sec 80RR benefits - YES: ITAT
THE assessee was working as officer in SBI and was a cricket player who played for the Country. The assessee claimed certain amount received from various cricket tournaments, awards and gifts and man of match awards as exempt in view of Board circular No.447/199/1/86IT(A1) dated 22.01.1986. AO disallowed the claim observing that in case of sportsman who is a professional, awards received by him shall be in the nature of benefit in exercise of his profession and therefore, liable to tax under the Income Tax Act. Assessee contended that he was not a professional cricketer and he was playing for the country under the aegis of BCCI which decided payments to be made to the players by way of fees, logo amount, share of prize money etc., and he had no control over the matches played and amounts received. CIT (A) allowed the claim of assessee stating that he was not a professional. The appeal was only made in respect of man of match award of Rs. 3 lacs.
THE issues before the Bench are - Whether the awards received by the assessee are exempt from income tax as he is not a professional cricketer but playing under the aegis of BCCI which decides the payments to be made to the players; Whether assessee is entitled for expenditure incurred by him for sports accessories, dress, equipment, coaching, training, travel & stay and Whether the assessee is entitled for deduction u/s 80RR considering that even though he is a cricket, the income for acting in T.V. / print media is received by him as a professional actor. And the verdict partly goes in favour of the assessee.
Central Excise
Default in payment of duty under Rule 8(3A) of Central Excise Rules, 2002 – Whether CENVAT Credit can be utilized for payment of duty during default – Matter referred to Third Member for deciding pre-deposit.: CESTAT
THIS is a case of default in payment of Central Excise duty. As per Rule 8(3A) of the Central Excise Rules, 2002, the assessee is required to pay duty consignment-wise, without utilizing CENVAT Credit during default period. However, the assessee continued to clear the goods by debiting the duty from CENVAT account. Accordingly proceedings were initiated resulting in demand of Rs. 13,39,225/- toward duty along with interest and penalties.
While disposing the stay application, the Member (J) held:
For the purpose of interim stay, we find that the Tribunal has considered the said issue in number of decisions and has held that in case of default in payment of duty in terms of Rule 8, subsequent utilization of Cenvat credit for clearance of goods would result only in confirmation of demand of interest, inasmuch as there would be no Revenue loss. Reference in this regard can be made to the Tribunal's decision in the case of Solar Chemferts Pvt. Ltd. vs. Commissioner 2011-TIOL-1968-CESTAT-MUM as also to a latest decision of Ahmedabad Bench in the case of F.S. Engineers vs. CCE, Ahmedabad (2013-TIOL-880-CESTAT-AHM). It stands held by the Tribunal that in case of utilization of credit instead of payment of duty in cash it results in loss to the Revenue only to the extent of interest. To the same effect is the decision of Tribunal in the case of Manipal Springs Ltd. vs. Commissioner (2012-TIOL-1708-CESTAT-BANG).
Regards,
Pawan Singla , LLB
M. No. 9825829075__._,_.___
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