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Showing 261 to 280 of 1043 Records
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2013 (1) TMI 795 - ITAT MUMBAI
Determination of Arms length price of transaction - Held that:- TPO rejected twelve out of 16 comparables submitted by the assessee and injected its own eleven comparables - also TPO removed bank interest, discounting and finance charges to arrive at the operating margin - also he included domestic transactions in turnover for calculation of ALP - Hence the case is referred back to AO as only the export transaction, i.e. the international transaction is considered for the purposes of determining the ALP - Also foreign exchange fluctuation gain is nothing but an integral part of the sale proceeds of an assessee carrying on export business thus the same shall be included in revenues - On the issue of exclusion of discount chargesit is held that they cannot form part of the operating cost, as they shall fall under the ambit of non operating expenses - Thus TPO shall determine the ALP afresh as per the proviso to section 92C(2) - Remanded back for statistical purposes
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2013 (1) TMI 794 - ITAT BANGALORE
Determination of Arm's length Price - Held that:- assessee adopted transaction net margin method (TNMM)to determine the ALP - TPO however rejected the assessee’s objections and selected 26 external companies as comparables - In the case of software services rendered by the appellant to its AE the functions performed by the appellant were the same as those performed by unrelated parties (Non-AEs) - internal” TNMM was selected as the most appropriate method - internal comparables are more appropriate and are to be given precedence over external comparables - The computation of arm’s length price in case of TNMM is done as per Rule 10B(1)(e) - assessee had also filed detailed functional similarity as well as the methodology of apportionment of expenses - TPO to adopt the internal TNMM instead of external TNMM - TPO to verify the cost allocation and the PLI and margin computation of software services rendered by the assessee to its AE - Remanded back for statistical purposes
Deduction u/s 10A - computed the business loss - Held that:- deduction under section 10A is undertaking specific and should be computed without considering the losses of other industrial units, which is a non-STP unit - Decided in favor of assessee
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2013 (1) TMI 793 - ITAT DELHI
Whether addition made u/s 68 on unsecured loans are bogus - Held that:- The assessee had filed before the authority the confirmations of bank account - creditors of the assesses are existing asseseess of the department having permanent account numbers - money has been received by cheque thus genuineness of transaction has been rightly accepted - hence the assessee has satisfactorily discharged its onus in establishing the genuineness of the claimed credit - Decided against the revenue
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2013 (1) TMI 792 - ITAT PUNE
Disallowance of depreciation on wind mills - Denial of rate of depreciation @80% - Held that:- Assessee has incurred the expenditure on foundation/civil work and erection and commissioning work and claimed depreciation at 80% on this - cost of foundation is the integral part of the wind mill and same is eligible for depreciation at the rate which is applicable to the wind mill - Decided in favor of assessee
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2013 (1) TMI 791 - ITAT DELHI
... ... ... ... ..... of reimbursement of actual expenses incurred by the assessee on rail freight and thus the assessee was not required to deduct tax at source there from. The decisions relied upon by the ld. DR having distinguishable facts as there was no involvement of payment of freight to a government organization and issue are not helpful to the revenue in the present case. 11. So far as payment of ₹ 11,325/- made by the assessee to the payee is concerned itself below the limit of ₹ 20,000/- prevalent when the payment was made on 8.3.2007, we agree with the contention of the ld. AR that the payment was not liable to TDS under the IT Act. The authorities below were thus not justified in making disallowance on this amount under the provisions of Section 40 (a) (ia) of the Act. The issue raised in the grounds is thus decided in favour of the assessee. The related grounds are thus allow. 12. In result appeal is allowed Order is pronounced in the open Court on the day of 28/01/2013.
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2013 (1) TMI 790 - BOMBAY HIGH COURT
Whether on the facts and in the circumstances of the case and in law the ITAT did not err in holding that no approval could be said to have been given when in fact the Joint CIT has duly applied his mind and corrected the draft assessment order and the changes were incorporated by the AO in the final assessment order? - Held that:- Admittedly the finding of fact was recorded by the Tribunal that no prior approval of the Joint Commissioner was taken before Income Tax officer passing the order. In view of the above, we see no reason to entertain the proposed question. Hence, the aforesaid appeals are dismissed with no order as to costs.
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2013 (1) TMI 789 - GUJARAT HIGH COURT
... ... ... ... ..... n the parties. The assessee had full authority and also responsibility to develop the housing project by not only putting up the construction but by carrying out various other activities including enrolling members, accepting members, carrying out modifications engaging professional agencies and so on. Most significantly, the risk element was entirely that of the assessee. The land owner agreed to accept only a fixed price for the land in question. The assessee agreed to pay off the land owner first before appropriating any part of the sale consideration of the housing units for his benefit. In short, assessee took the full risk of executing the housing project and thereby making profit or loss as the case may be. The assessee invested its own funds in the cost of construction and engagement of several agencies. Land owner would receive a fix predetermined amount towards the price of land and was thus insulated against any risk.” In the result, Tax Appeal is dismissed.
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2013 (1) TMI 788 - ITAT CHENNAI
Eligibility for the claim of deduction u/s.80IA - Held that:- An undertaking to be regarded as small scale industrial undertaking there must not have investment in plant and machinery exceeding ₹ 1 crore u/s 11B at the end of the previous year - simply because in a earlier year an assessee had satisfied the condition of small scale undertaking, it cannot ipso facto be taken that the assessee would be regarded as small scale industrial undertaking in the subsequent years also - it is observed that the assessee’s investment in plant and machinery exceeded the limit specified u/s 11B of the Industries (Development and Regulation) Act - Hence the deduction is not allowed - decided against the assessee
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2013 (1) TMI 787 - CESTAT, BANGALORE
... ... ... ... ..... mmissioners order dt. 31/12/2010 itself was accompanied by a preamble which advised the appellant to appeal to this Tribunal within 3 months, if aggrieved. The provisions of Section 86(3) of the Act coupled with the advisory preamble to the impugned order were enough to make it incumbent on the appellant to file the appeal within the statutory period of limitation. (d) A reading of Section 84 of the Act would make it clear that any proceedings under that provision of law could have been resumed even while an appeal against the impugned order was pending. Section 74 takes care of the effect of any amendment to the impugned order so as to obviate prejudice to the aggrieved party. Therefore, the proceedings under Section 74 cannot be a plank for the appellant vis- -vis the heavy delay of the captioned appeal. 6. In the result, the delay of around 225 days remains unexplained and the COD application stands dismissed. Consequently, the appeal also stands dismissed as time-barred.
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2013 (1) TMI 786 - ITAT CHENNAI
Disallowance of expenditure incurred in relation to income not includible in total income u/s 14A - Held that:- AO will have to verify the correctness of the claim that no expenditure has been incurred in relation to income which does not form part of total income - AO has to accept the claim of the assessee -after giving the reasonable opportunity with the correctness of the claim AO can reject the claim and state the reasons for doing do - further AO will have to determine the amount of expenditure incurred in relation to such income - As per the judjement of Hon’ble Jurisdictional High Court in [T.C.(A.) No. 2621] of 2006 titled as M/s. Simpson and Co. Ltd. vs. DCIT - it would be reasonable and appropriate if the disallowance is restricted @2% of the exempt income as returned by the assessee - decided partly in favor of assessee
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2013 (1) TMI 785 - ITAT MUMBAI
Deduction u/s. 36(1)(viii) - Assessee, govt company claimed deduction in respect of special reserves created in the balance-sheet, as it is a financial corporation which is engaged in providing long-term finance for development of infrastructure facilities - Claim was rejected on the ground that it is neither a financial corporation nor a public-company. - HELD THAT:- In Sec. 36(1)(viii) ‘financial corporation’ is defined to “include a public company and a Government company". Any entity incorporated under a statute carrying on the business of financing would come under the definition of financial corporation. The definition is not an exhaustive definition and the term financial corporation has been defined in an inclusive manner so as to include a Govt. company and a public company. Even otherwise the assessee is a Govt. company since the Central Govt. holds more than 51% of the share capital of the bank and as defined in Sec. 617 of the Companies Act.
Relying upon the own case, UNION BANK OF INDIA VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2012 (6) TMI 500 - ITAT MUMBAI], matter was remitted back to AO to verify and examine the deduction, which has been transferred to the special reserves subject to the prescribed percentage of profits derived from providing long-term finance for the approved purposes mentioned in section 36(1)(viii).
Matter restored back.
Deduction on Notional gain on Derivatives - Assessee submitted that trading derivatives held by the bank constitute its stock in trade and according to the accepted basis, valuation of closing stock it should be valued at cost or market price, whichever is lower. Therefore, while the loss arising on account of revaluation of trading derivatives must be allowable as deduction. CIT rejected the contention as assessee didn't follow RBI guidelines for recognizing profit and loss.
HELD THAT:- Assessee is entitled to claim loss on revaluation of trading derivatives. The notional unrealized gain cannot be charged to tax. It is settled principle of law as laid down by Hon'ble Apex Court in the case of CHAINRUP SAMPATRAM VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL [1953 (10) TMI 2 - SUPREME COURT], that while anticipated loss is taken into account in valuing closing stock, the anticipated profit in the shape of appreciated value of the closing stock is not brought into account. No prudent businessmen or trader will show increased profit on unrealised gain. Findings of the CIT(A) were reversed and it was held that the assessee is entitled to claim loss on revaluation of trading derivatives
Decision in favour of assessee.
Applicability of sec. 115JB on Banks - Assessee, a banking company's accounts are being prepared as per Schedule III of Banking Regulation Act and not as per Schedule VI of the Companies Act. It was contended that in the earlier years provisions of s.115JB of IT Act were applicable on it. - HELD THAT:- Relying on the judgement of KRUNG THAI BANK PCL VERSUS JOINT DIRECTOR OF INCOME TAX - INTERNATIONAL TAXATION, MUMBAI [2010 (9) TMI 18 - ITAT, MUMBAI], it was held that provisions of section 115JB are not applicable in the case of the assessee.
Decision against Assessee.
Prior Period Expenses - Assessee claimed some amount as prior year expenses, it was submitted that the liability to pay said expenses arose only during the year, and hence cannot be considered as prior period expenses. HELD THAT:- Incurring of expenses is a continuous process and there cannot be cut-off date at any point of time to be classified as prior period expenses.
Decision in the case of TOYO ENGG. INDIA LIMITED. VERSUS JOINT COMMISSIONER OF INCOME-TAX. [2005 (9) TMI 237 - ITAT BOMBAY-J], relied upon and the contention of the assessee was upheld that it has branches all over the country, where incurring of expenses is a continuous process and there cannot be cut-off date at any point of time to be classified as prior period expenses liable to be disallowed.
Decision in Favour of Assessee.
Bad and Doubtful Debts u/s. 36(1)(viia) - AO restricted the deduction in respect of provision for bad and doubtful debts. Assessee claimed entire eligible amount as per the sec. 36(1)(viia) should be allowed as deduction instead of restricting it to the amount of provisions made in the books of account. - HELD THAT:- Provisions of section 36(1)(viia) are very clear which provides that in respect of ‘any provision’ made for bad and doubtful debts an amount not exceeding 7.5% of the total income and an amount not exceeding 10% of the aggregate average advances of the rural branches of such bank shall be allowed as deduction. Once a provision for bad and doubtful debts are made by the scheduled bank having rural Branches, the assessee is entitled to a deduction, which is quantified not with reference to the amount provided for in the account but with respect to certain percentage of the total income and also certain percentage of aggregated advances.
Decision in favour of Assessee.
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2013 (1) TMI 784 - ITAT MUMBAI
... ... ... ... ..... , as these expenses mostly pertain to carrying out of various operations and activities carried on by the assessee company, which are necessary for maintaining a corporate establishment and are intricably linked for earning of the income under various heads, as shown by the assessee. The following expenses are allowable, which also includes some of the expenses allowed by the learned Commissioner (Appeals) - Sl.no. Particulars Amount claimed (Rs. ) 1. Directors Remuneration 2,58,000 2. Salaries 63,000 3. Staff Welfare 707 4. Audit Fees 22,472 5. Insurance 6,381 6. Other Expenses 12,700 7. Postage, Telegram & Telephone Expenses 3,345 8. Printing and Stationary 350 9. Rates and Taxes 830 10. Repairs and Renovation 38,916 11. Travelling Expenses 1,00,609 12. Professional Fees 30,000 12. Thus, in our conclusion, we allow the expenses claimed under various heads, as have been elaborated in serials no.1 to 12 above. 13. In the result, assessee’s appeal is partly allowed.
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2013 (1) TMI 783 - ITAT MUMBAI
Mark to Market Loss - Rule of Prudence - AO had disallowed mark- to- market loss claimed on account of trading in derivative transactions. The reason assigned by the AO was that loss on the last date of financial year was in the nature of noncrystallized loss and such loss should be added back for the purpose of computing taxable income of an assessee. - HELD THAT:- Rule of prudence that means that while anticipated losses can be taken note of while valuing the closing stock, anticipated profits cannot be recognized, is applicable in this case. The addition made by disallowing the mark-to-market loss claimed on account of trading in derivative transactions should be deleted.
Decision in the case of EDELWEISS CAPITAL LTD., MUMBAI VERSUS INCOME TAX OFFICER 3 (1) (1) , MUMBAI [2012 (10) TMI 223 - ITAT, MUMBAI], relied upon.
Decision in favour of assessee.
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2013 (1) TMI 782 - ITAT DELHI
Disallowance of provision for post retirement medical as unascertained liability - Held that:- Contingent liabilities can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation - Due to the change in the Accounting Standard in respect of the accounting of post retirement benefits, the assessee got done the actuarial valuation - . A liability which has already accrued though discharged on a future date would be entitled for deduction - Decided in favor of assessee
Can interest paid in respect of capital borrowed allowed for deduction u/s 36(1)(iii) - Held that:- any amount of the interest paid towards or in respect of capital borrowed for acquisition of an asset or for expansion of the existing business regardless of its capitalization in the books or otherwise would not qualify as deduction - there is no finding regarding the source of the margin money whether it was from the borrowed fund borrowed for the purpose of expansion or from the other borrowings for which the assessee has claimed the interest paid as the revenue expenditure - the issue to the file of the AO - Remanded back for statistical purposes
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2013 (1) TMI 781 - ITAT MUMBAI
Whether Fringe benefit tax is levied on certain expenditure -club membership fees - Held that:- “Fringe benefit” cannot arise when expenditure is incurred on persons who are not employees - club membership fee, the payments made to LIMRA and Actuarial Society of India, are to be excluded as they are not payments to clubs - the issue is restored back to the file of AO for adjudication afresh - allowed for statistical purposes
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2013 (1) TMI 780 - ITAT NAGPUR
... ... ... ... ..... unt of disallowance of interest for both of the years. 13. Now, we will take appeal filed by the assessee M/s Raju Steel Industries i.e. ITA No.70/Nag/2011 for the assessment year 2006-07. 14. The assessee is objecting the confirming the disallowance of ₹ 6,29,463/- out of interest paid as non-business purpose. 15. Similar additions were made in the case of M/s Bharat Hardware & Iron Stores. We have already disposed of the appeals in the case of M/s Bharat Hardware & Iron Store, wherein we have deleted the additions made and confirmed by the lower authorities on account of disallowance of interest. Since, facts are similar, therefore, for the same reasons, the addition made and confirmed by the lower authorities is hereby deleted. 16. Resultantly, the appeals of the department i.e. ITA Nos.65&66/Nag/2011 are dismissed and appeals of the assessees i.e. ITA Nos. 68 to 70/Nag/2011 are allowed. Order pronounced in the E-Court on this 9th day of Jan.2013. -2013.
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2013 (1) TMI 779 - ITAT DELHI
... ... ... ... ..... cision, it was held that a loan grants temporary use of money, or temporary accommodation, and that the essence of a deposit is that there must be a liability to return it to the party by whom or on whose behalf it has been made, on fulfillment of certain conditions. If these tests are applied to the facts of the case before us, it may be seen that the receipt of share application monies from the three private limited companies for allotment of shares in the assessee-company cannot be treated as receipt of loan or deposit. In any case, the Tribunal has rightly noticed the cleavage of judicial opinion on the point and held that in that situation there was reasonable cause u/S.273B, applying the judgment of the Supreme Court in Vegetable Products (supra).” Considering these, we sustain the order of the CIT (A) and dismiss the revenue’s appeal. 5. In the result, the appeal of the revenue is dismissed. Order pronounced in open court on this 24th day of January, 2013.
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2013 (1) TMI 778 - ITAT PUNE
Disallowance of depreciation on wind mills @80% - Rate of depreciation on expenses incurred in connection with installation, erection and commissioning of the wind mills - Cost of civil work consisting of foundation/ground work - Held that:- the cost incurred by the asessee on civil work cannot be treated as an integral part of the entire wind mill - depreciation is resticted to @ 10% - cost of foundation as well as cost incurred on erection and commissioning forms integral part of cost of the windmill and thus eligible for depreciation at 80% - Partly in favor of assessee
Whether the profits earned on one unit can be set off against another unit - Held that:- assessee had been setting off the loss of depreciation from different wind mill undertakings against the income of the other business - Assessee is maintaining separate books of accounts in respect of 3 wind mills and working out the profit or losses - three wind mills at the 3 locations are independently operated and the financial results are separately worked out - every unit constitute a separate undertaking engaged in the eligible business and losses from one unit cannot be set off against the profits of another unit engaged in the same business for the purpose of computing the deduction u/s 80IA
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2013 (1) TMI 777 - ITAT PUNE
... ... ... ... ..... turn of income but the computation attached with the return of income clearly indicated about the agricultural activity undertaken during the year. She stated that due to two separate Balance Sheets, one for her medical practice and another for agricultural activity, there was a discrepancy in the capital account. The Assessing Officer has not considered the balance in the capital account of agricultural activity which was of ₹ 20,48,448/-. The Ld. CIT(A) was convinced with the explanation of the assessee as well as the reconciliation given and he deleted the addition. The only grievance of the Revenue is that the Ld. CIT(A) should not have admitted the additional evidence. We find that no additional evidence is filed but the reconciliation of the two capital accounts have been filed. We find no merit in Ground No.3. Accordingly same is dismissed. 11. In the result, Revenue’s appeal is dismissed. Pronounced in the open court on this the 23rd day of January, 2013.
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2013 (1) TMI 776 - DELHI HIGH COURT
... ... ... ... ..... e matter was adjourned for today. Today also, the petitioner is not present and has deputed a counsel to appear on his behalf. Considering the adjournments given earlier and the Status Report in terms of the order of the Court having been filed, we do not deem it appropriate to adjourn the matter. We have perused the Status Report filed by the respondent. The Status Report would show that only few irregularities mentioned therein were found and those irregularities are not serious enough at this stage to warrant a criminal investigation. The report further shows that during inspection, no documentary proof in the record of the Association was found to show the use of the fund in any such political activity or in IAC Movement or agitation. Considering the fact that writ petition has already been disposed of on 30.05.2012 and a Status Report in compliance of the said order has also been filed, we see no good reason to keep this matter pending. The matter is accordingly closed.
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