Appellants made a request before the adjudicating authority for an opportunity to produce evidence to show that the cost of design and drawing are included in the assessable value of patterns/castings and appropriate duty is paid. This contention has not been taken into consideration by the adjudicating authority. In view of the above, the impugned orders are set aside and the matter is remanded to the adjudicating authority to decide the matter afresh upon showing the proof of deposit of the amount so directed and after giving adequate opportunity of hearing to the appellants.
The first allegation relates to transfer of funds in the bank account of the appellant. It is alleged that the appellant has transferred funds from its bank account earmarked in clients trading transactions to the bank account earmarked for its own business operations. In other words, there was no proper segregation of the funds relating to the broker and the client.
The first issue being: the treatment to be accorded to expenditure incurred by the assessee on purchase of software applications. These applications being: MS Office Software, Anti Virus software, Lotus Notes Software and Message Exchange applications. The assessee in respect of these applications acquired a licence to use the said applications on payment of consideration. The said expenditure has been disallowed by the Assessing Officer in each of the assessment years by treating the expenditure as one incurred on capital account. Accordingly, depreciation at the rate of 25% was allowed to the assessee.
Supreme Court in the case of CIT v. Mir Mohammed Ali [1964] 53 ITR 165 had considered the meaning of the word ‘machinery’ and pointed out that the word is not a technical term and in the absence of any definition under the Act, ordinary meaning would prevail. Indeed rule 8 of the Income-tax Rules treats aero-engines separately from aircraft, but this cannot be used to interpret the clauses in the Act that what was purchased and installed was machinery and after installation, a wider meaning has to be given to the said term.
Normally, transportation is after or post manufacture. The onus was on the assessee to show and establish that, because of the peculiarity of facts, transportation charges should be treated as sale proceeds or part of sale proceeds of the goods manufactured and were intrinsically connected and had live link with the manufacturing activity. In the absence of aforesaid evidence and material placed by the assessee, the transportation charges cannot be treated as profit and gain derived from the manufacturing activity, which qualifies for deduction under section 80-I.
The assessee, while filing her initial return of income, disclosed her income to be Rs. 1.34 lakhs in the relevant assessment year and the said return finds mention of receiving gift of Rs. 2.50 lakhs from ‘A’. In the revised return the said amount of gift was declared as part of her income. Thus, there was no concealment in respect of above amount in filing the return. She further surrendered a sum of Rs. 2.50 lakhs as additional income which was also received by her as gift from one ‘U’. In this manner her taxable income was computed to be Rs. 6.34 lakhs by adding the aforesaid two amounts of Rs. 2.50 lakhs each as finally disclosed.
Most of the States have legislated provision in their respective VAT Acts for allowing a restricted input tax credit on the goods purchased within State if such goods are transferred outside the State otherwise than as sale. Ussualy Input tax credit in such cases is allowed only in excess of 4% or 2%.
In our considered opinion the order passed by the Assessing Officer shows complete non application of mind. He has not discussed as to what was the difference between the value estimated by the departmental valuer as also given by the assessee’s valuer and what was the reason for determining the income at such a low figure. The Commissioner was therefore, perfectly justified in setting aside the assessment in exercise of powers under section 263 of the Act as the assessment order was erroneous and prejudicial to the interest of the Revenue.
All services except those which are in the negative list will become expensive from today 01.07.2012 with the implementation of the new service tax regime. With the exception of 38 services, which figure in the negative list, all other activities would attract 12% tax. The government had earlier decided to implement the negative list from July 1.
Chimanlal Manilal Patel Vs. ACIT The AO has not disputed the consideration received by the assessee. The addition has been made on the basis of deeming provisions of section 50C. The assessee has furnished all the facts of sale, documents! material before the AO. The AO has not doubted the genuineness of the documents/details furnished by the assessee. Only because the assessee agreed to the additions because of the deeming provisions it cannot be construed to be filing of inaccurate particulars on the part of the assessee. The assessee agreed to addition on the basis of valuation made by the stamp valuation authority cannot be a conclusive proof that the sale consideration as per the sale agreement is seemed to be incorrect and wrong. In view of these facts we are of the considered view that penalty cannot be levied on the basis of deeming provision.
