Appellant is a registered mandap keeper and was issued a show cause notice. There could be a situation where the appellant could be under a bona fide belief as to not to discharge the Service Tax liability on the advance amount received, during the material period, the issue of Service Tax liability under the Mandap Keeper services also was in litigation finally settled by Hon’ble Apex Court in the case of Tamilnadu Kalyana Mandapam Association v. Union of India[2004] 136 Taxman 596. I find that the appellant had discharged the Service Tax liability on being pointed out. As the appellant is not contesting the Service Tax liability and interest thereof, in my view, the lower authorities should not have issued the show cause notice as provisions of section 73(3) may apply in this case. Be that as it may, the judgment of the Tribunal in the case of Chintamani Mangal Karyalaya (P.) Ltd. (supra) in an identical issue, has held in favour of the appellant.
Tribunal relying on its decision in case of Radhe Developers v. ITO [2008] 23 SOT 420 (Ahd.) held that respondent assessee would be eligible for deduction under section 80-IB(10) of the Act on the housing project development though the assessee may not be the owner of the land.
In the present case, admittedly there is no past demand which has remained unpaid. Therefore only when the Assessee files a return of income quantifying his total income for the assessment years in question can it be said that there has arisen tax liability for the relevant AYs. The due date for filing return of income or the fact that advance tax was due on a particular date will not make the liability of the Assessee an “existing tax liability” on those dates. The Hon’ble Karnataka High Court in the case of CIT v. R.V. Raibagy & Co. & others ITR Case Nos. 4 to 10 of 2003 dated 29.3.2005 has also taken the view that adjustment of seized cash against tax due u/s.140A of the Act, on income declared in a return of income filed should be allowed.
Director of assessee company Mr. Varun Sarup Agarwal issued a cheque on 1.2.2007 on behalf of the assessee company for payment of rent and assessee company opened its account after issuance of this cheque. The amount of Rs. 2 lakh was deposited in the bank account of Mr. Varun Sarup Agarwal with a bona fide intention to prevent dishonoring of the cheque issued to the landlord of the assessee company and the remaining amount was returned back to the assessee company’s bank account. In the facts and circumstances of the case, it is doubtful whether the amount received by director with an intention to deposit it to the bank account with a bona fide belief that this would save the prestige of the company can be characterized as a loan or a deposit within the meaning of Section 269T of the Act. Although Section 269T of the Act does not expressly confer any exemption from transaction between connected parties or sister concern but a perusal of the decided cases on this point shows that there is a cleavage of judicial opinion.
It is observed that the claim of the assessee about wrong classification of double taxation credit was rejected by the AO because the assessee did not file a revised return. This view was canvassed by the AO on the basis of the afore-referred judgment in the case of Goetze India Ltd. (supra) However, it is pertinent to note that para -4 of this judgment provides that operation of this judgment is restricted to the AO and it does not, in any way, affect the powers of the Tribunal under section 254 of the Act. We, therefore, direct the AO to examine and allow assessee’s claim about the eligible amount of double taxation credit as per law after allowing a reasonable opportunity of being heard to the assessee.
In the present case the CIT (Appeals) had found as a fact that from the assessment year 1997-98 it was the assessee’s wife Mrs. Pallavi Sood who was the owner of M/s Trans World International. It was on that basis that she had filed the return of income and the finding of the CIT (Appeals) was also accepted by the Revenue. The finding of fact has not been challenged before us as perverse. It seems to us that the Revenue, having accepted the finding in the assessee’s wife’s case, cannot take a different view in the assessment of the husband. That would amount to taking contradictory or inconsistent stands without any just cause. We do not, therefore, see any infirmity or error of law in the decision of the Tribunal.
Obviously therefore, the Assessing Officer of the searched person during the pendency of the assessment proceedings, could not have arrived at the satisfaction that the income was that of the present assessee and not the persons originally searched.
In the circumstances, we find no reason or justification to entertain the request for setting aside the order of the Tribunal dated 28 May 2007, particularly after the lapse of time that is prescribed in the statutory remedy available under Section 254(2). The petition has been filed almost five and a half years after the order of the Tribunal with no reasonable or cogent explanation for the delay. As we have noted already, there is no merit in the alternate submission that the order of the Tribunal dated 28 May 2007 left open all the grounds of appeal. Plainly that was not so.
It is undisputed that the transaction involve two domestic companies, who are individual and independent subsidiaries of their own and independent holding companies. This is also not in dispute that neither of the holding companies could be called the AE of the other contracting party. This is also not in dispute that, there is any transaction, involving a non resident company.
We have heard the rival submissions and perused the material before us. In the preceding year, this forward contract profit was more than 6 crores. The nature of income was similar to preceding year in the year under consideration. Therefore, by following the order of the Co-ordinate Bench, we also held that the nature of receipt is business.
