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Income Tax - Case Laws
Showing 1 to 20 of 654 Records
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2014 (2) TMI 1428
Validity of Reopening of assessment - CIT(A) upholding the action of the ITO in declining the assessee’s claim that the impugned transactions of purchase and sale of agriculture land were in HUF capacity and that the same were therefore, not taxable in individual capacity - as argued assessee Sh. Surjit Singh having died before the filing of return against notice u/s 148, the ITO ought to have issued fresh notice impleading all the legal heirs of the deceased, sans which, the impugned order is bad in law - HELD THAT:- We are of the view that FAA has passed the impugned order without appreciating the evidence produced by the assessee during the course of appellate proceedings, which the assessee has raised in ground No.5 in all the appeals. We are of the considered view that the ld. first appellate authority ought to have appreciated the additional evidence filed by the assessee while deciding the issue in dispute, which is very much essential for adjudication of the case.
The issues involved in all the grounds of appeals are interconnected and some of them are legal issues, which are required to be decided on the basis of additional evidence furnished by the assessee and as per material available on record and after hearing the Ld. counsel for the assessee.
In the interest of justice, we are not commenting upon the merits of the case on all the issues involved in the present appeal, as mentioned in the aforesaid paragraph while reproducing the grounds of appeal raised by the assessee.
Keeping in view the above facts and circumstances of the case and in the interest of justice, we are of the view that the issues in dispute require fresh adjudication at the level of the first appellate authority.
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2014 (2) TMI 1421
Excess deduction u/s 80IB/80IC - method of allocation consistently adopted by the Appellant and in re-allocating 50% of the following overheads of the non-eligible undertakings to the eligible undertakings of the Appellant, while computing the deduction u/s 80IB/80IC - HELD THAT:- As decided in assessee own case for AY 2006-07 [2014 (4) TMI 520 - ITAT MUMBAI] allocation of expenses made by the assessee between eligible business and non-eligible business for the purpose of computing deduction u/s 80IB/80IC of the Act was reasonable and there was no justifiable reason for the A.O. to disturb the same and make re-allocation on adhoc basis. We, therefore, delete the addition made by the A.O. by restricting the claim of the assessee for deduction u/s 80IB/80IC by reallocating the common indirect expenses and allow ground No. 1 & 2 of the assessee’s appeal.
TP Adjustment - treating the guarantee to a banker as an ‘international transaction’ within the meaning of Section 92B - HELD THAT:- The issue covered in the grounds are covered by the decision of the Coordinate Bench in its own case in [2014 (4) TMI 520 - ITAT MUMBAI] wherein take the rate of guarantee commission at 0.5% as ALP by respectfully following the decision of coordinate Bench of this Tribunal in the case of Nimbus Communications Ltd. [2013 (9) TMI 204 - ITAT MUMBAI]
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2014 (2) TMI 1419
Income accrued in India - fee for technical services - receipts for supply of design and engineering drawings - Income taxability in India v/s Japan - HELD THAT:- Tribunal, on fact, found that there has been no accrual of income in India and this accrual of income has taken place in Japan. As such, the Income Tax Act cannot be made applicable. We feel that the decision is legally correct and we do not find any element of law to be decided in this appeal.
The appeal is accordingly dismissed.
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2014 (2) TMI 1415
Capital gain computation - reference to Valuation Cell under S.50C, S.55A and S.142A - HELD THAT:- Under S.50C in determining the sale value of consideration according to stamp value, if the assessee objects to the valuation, then reference under S.50C can be made to Valuation Officer. This situation does not arise in this case. U/s 55A, with a view to ascertain the fair market value of a capital asset, AO can refer the valuation to Valuation Officer, but the fair market value under this Chapter is adopted for the purpose of cost of acquisition of an asset, while computing the capital gains and not for sale consideration. If S.55A could be invoked to arrive at the sale consideration, then there is no necessity to introduce provisions of S.50C which enables the AO to adopt the SRO value, where the sale consideration is not in accordance with the SRO value.
While computing the capital gains, substitution of sale consideration with fair market value can only be done under S.50C. There is no other provision in the Act to do so. Even the reference u/s 142A of the Act for determining the value of any investment can only be done with reference to S.69, S.69B, S.69A or for the purpose of fair market value of any property under S.56(2). In the given facts of the case, these provisions are not applicable, nor can be invoked by the AO.
What Revenue is contesting can be appropriate if the reference was made in the hands of the builder, who may claim the cost of acquisition to ascertain the investment in the building, but in the assessee’s case, who adopted the actual cost of construction for arriving at the sale consideration, these provisions do not apply. This is what the learned CIT(A) has decided. Therefore, we do not see any reason in the ground raised by the Revenue. Accordingly, the grounds are rejected, and the Revenue’s appeal stands dismissed.
Deduction u/s 54 - proportionate capital gains on each house - HELD THAT:- While calculating the exemption on each of the flats eligible for each of the houses, the AO is directed to take into consideration, the capital gains arising on each of the house. As seen from the development agreement, the assessee is having a house having land of 940 sq. yards; another two houses in joint ownership with wife(items No.(ii) and (iii) on page 2 of the Development Agreement) of 222 sq. yards each; and a fourth house having land of 78 sq. yards, being item no (iv) in the Development Agreement. Since the proportion of capital gains vary according to the land included in the total land surrendered to the developer, AO is directed to work out the proportionate capital gains on each house, according to the land involved in that house and allow exemption under each of the houses under S.54. This aspect of working out of capital gains in respect of each of the houses has to be done by the AO, even though the assessee is entitled for exemption in respect of four houses, as part of the development agreement. Therefore, the computation aspect of exemption u/s 54 is restored to the file of the AO.
Action of AO in including the value of three-bed room accommodation for a period of 24 months - HELD THAT:- As the learned counsel submitted that rent being compensation cannot be brought to tax. This contention, however, cannot be accepted, as bearing cost of rent for dispossessing the house used for residence is part of the same agreement, so it requires to be considered while arriving at the sale consideration of the land given for development agreement. Therefore, the action of considering/adopting the value of providing three bedroom accommodation as part of the agreement, in computing the capital gains is accepted. However, the valuation of the rent requires examination. AO is directed to obtain the actual rent payment by the builder and adopt the same value while computing the capital gains. The assessee shall provide the details of actual rent borne by the builder for this purpose. With these directions, this ground is considered as allowed.
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2014 (2) TMI 1412
Deduction u/s 80P - assessee states itself to be a cooperative society engaged in the business of providing credit facilities to its members and hence falls within the definition of a cooperative bank - Scope of amendment to sec 80P(4) - whether the assessee, a cooperative society providing credit facility to its members is a cooperative bank or not so as to be covered by section 80P(4) of the Act denying deduction aforesaid? - HELD THAT:- We make it clear that the Revenue has failed to file any paper book or evidence so as to prove that the assessee/co-operative society is a co-operative bank whose claim for deduction u/s 80P is hit by sub-section(4). In these circumstances, we uphold the CIT(A)’s order granting deduction to the assessee u/s 80P of the Act and reject contentions of the Revenue.
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2014 (2) TMI 1411
Rectification of mistake - application filled u/s 10(23C) filled to wrong authority - Grievance of the Revenue through this Miscellaneous Application is that the assessee has not filed any application in the office of the CCIT on 13- 03-2006 - HELD THAT:- From the various pages of the paper book, we find the assessee has filed the application in the prescribed form to the CCIT through the office of the CIT which has even been acknowledged by the ITO, Ward- 9(4), Akurdi, Pune vide his letter dated 23-06-2006. We find the Tribunal has already considered the application filed by the assessee. As per the note below Form No.56D the application form should be sent to the CCIT or DG through the CIT or DIT (Exemption) having jurisdiction over the assessee.
Assessee has precisely done the same. The Tribunal after considering the application filed by the assessee through the office of the CIT has taken a view. Therefore, adjudicating the same on the basis of the Miscellaneous Application filed by the Revenue amounts to review of its own order by the Tribunal which is not permissible under the law. We therefore dismiss the Miscellaneous Application filed by the Revenue being devoid of any merit. The Miscellaneous Application filed by the Revenue is accordingly dismissed.
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2014 (2) TMI 1409
Nature of expenditure - capital or revenue expenses - expenditure incurred was towards repair/replacement of cost of nozzles, buckets, shrouds, bearings, transition pieces and combustion liners which are parts of gas turbines - HELD THAT:- There is no replacement of the gas turbine as a whole but certain repair and replacement to some of the parts of the gas turbine, which does not result in bringing into existence a new asset of enduring nature, rather, the repair and maintenance are of recurring nature and essentially required for smooth running of business of the assessee i.e, generation of power. The other decision of the Hon’ble Supreme Court relied upon by the learned D.R. in the case of CIT V/s. Sri Mangayarkarasi Mills (P) Ltd. [2009 (7) TMI 17 - SUPREME COURT] also following the decision in the case of CIT V/s. Saravana Spinning Mills [2007 (8) TMI 16 - SUPREME COURT] has laid down the same proposition of law. On the other hand, the decisions relied upon by the assessee as noted in the order of the CIT(A) clearly supports the view that the expenditure incurred by the assessee cannot be treated as capital expenditure. Thus we direct the Assessing Officer to delete the addition made on account of disallowance of expenditure.
Addition on account of social welfare expenditure - Revenue or capital expenditure - HELD THAT:- A perusal of the assessment order makes it clear that the Assessing Officer admits the fact that the community hall is in the control of Village Panchayat as its ultimate asset. In such view of the fact it cannot be held that it is a capital expenditure as there is no capital asset created by the assessee for it. That besides, as has been rightly held by the CIT(A) social welfare expenditures incurred by a company helps in improving the working with the native people of the nearby area and it also improves the condition of the area inhabited by its employees and others. Therefore, such social welfare expenditures are to be allowed as business expenditure.
As in Karnataka Financial Corporation [2009 (12) TMI 410 - KARNATAKA HIGH COURT] held that the amount spent by the Corporation towards development of model villages has to be considered as expenditure incurred towards his business promotion and therefore, allowable as a business expenditure. Therefore, considering the totality of facts and circumstances, we are of the view that the CIT(A) was justified in deleting the addition.
Addition of prior period expenditure - A.O. held that as the expenditure has apparently accrued and chargeable to those years as per the clauses of term loan agreement between the parties and the expenditure is apparently interest and penal interest for nonpayment/ deferment by the assessee, the same is not an expenditure allowable for the year - HELD THAT:- After going through the order of the CIT(A) we do not find any infirmity in his finding. As can be seen from the facts on record, the payment of interest on term loan was because of a settlement reached with the bank. It is not the case of the Assessing Officer that the interest paid was either claimed or allowed as expenditure in the earlier years. Therefore, the deduction certainly can be allowed under section 43B of the Act when the amount was actually paid by the assessee. CIT(A) having found that the assessee has paid an amount during the year out of the total expenditure the same has rightly been allowed as a deduction. Accordingly, we confirm the order of the CIT(A) and dismiss the ground raised by the department.
Addition of claims raised towards surcharge - HELD THAT:- Reasoning of the CIT(A) that the assessee had taken unilateral decision for waiver of the surcharge is not correct. That besides, when A.P. Transco is contesting the levy of surcharge, which is very much evident from its letter under reference, and demanding for withdrawal of the levy there is no other option on the part of the assessee but to waive the surcharge levied. In this view of the matter, we are of the view that CIT(A) was not justified in rejecting the claim of the assessee. We, therefore, direct the Assessing Officer to allow the expenditure since the decision to waive the surcharge is taken during the financial year relevant to the assessment year under dispute and the amount has been written off during the year in the books of the assessee. The ground raised is therefore, allowed.
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2014 (2) TMI 1408
Revision u/s 263 - CIT directing AO to make verification/investigation on cash gifts - HELD THAT:- Ld. CIT had not applied his mind but the matter was referred by the AO for initiating the proceeding under section 263 - In the present case it is noticed that the notice dated 17/01/2013 under section 263 of the Act was issued only on receipt of the proposal under section 263 from the ITO, Ward-2(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2(2), Kota.
It is well settled that the Ld. CIT while exercising the revisionary powers under section 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justified. Therefore, before taking any action, Ld. CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must
As in the present case, the satisfaction was of the ITO (Tech.) who proposed action under section 263 of the Act, but not of the Ld. CIT. Therefore, issuance of notice under section 263 of the Act on the basis of the proposal made by the ITO was void ab initio. We, therefore, set aside the same. Appeal of assessee allowed.
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2014 (2) TMI 1403
Addition on account of battery replacement expenses - additional evidence was admitted after hearing both the parties - HELD THAT:- Since the nature of this additional evidence is such that it requires verification at the end of AO, the matter is restored back to his file for fresh adjudication after making necessary inquiries/investigations about the veracity of this additional evidence. - cross appeals filed by assesses and revenue are allowed for statistical purpose.
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2014 (2) TMI 1397
Excess deduction claimed u/s 36(1)(viia) - excess deduction of 10% of average advances of rural branch is available to rural branches and as per explanation (ia) below section 36(1)(viia) ‘rural branch means a branch of schedule bank or a non schedule bank (and thus rural branch of a cooperative bank is not covered) - CIT-A deleted the addition - HELD THAT:- In the present case, it is noticed that the Ld. CIT(A) decided the issue in favour of the assessee in consonance with the decisions taken by the coordinate benches of the ITAT at Jaipur [2014 (1) TMI 833 - ITAT JAIPUR] and Cochin [2012 (5) TMI 22 - ITAT COCHIN]. He has followed the decision of.Jaipur Central Co-operative Bank Ltd. [2014 (1) TMI 833 - ITAT JAIPUR]. We, therefore, do not see any merit in this appeal of the department.
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2014 (2) TMI 1396
Condonation of delay - Sufficient reason for delay - whether the transactions of the appellant with M/s. Bharat Petroleum Corporation Limited and M/s. Indian Oil Corporation Limited are transactions under which the appellant could be treated as providing vehicles for hire (tanker lorries to carry materials) or whether the appellant was employing herself as a carrier? - HELD THAT:- It is not as if the appellant had not shown any cause at all to condone the delay. The sufficiency or otherwise in such matters have necessarily to be weighed also, on the scales of justice, depending upon the question whether the delay could be condoned at least on terms. This largely depends on the cause pleaded for the delay and the view that the appellate court, tribunal or authority could take on a prima facie superficial examination of the grounds of appeal, which may also point out that ends of justice require the appeals to be entertained.
In this view of the matter, we see that the substantial question of law that arises for decision in these appeals is as to whether the Tribunal had acted, in accordance with law, while it refused to condone the delay, at least on terms. On hearing the learned counsel for the parties on that particular issue of law, we are satisfied that the said question is a substantial question of law, and, has to be answered in favour of the appellant.
In the result, these appeals are allowed and the impugned orders are set aside on condition that the appellant pays the Department an amount of ₹ 10,000/- (Rupees ten thousand only) as costs in each of these appeals within a period of two weeks from today, by making appropriate remittance
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2014 (2) TMI 1393
Addition made under the head ‘capital gains’ - Joint Development agreement taken as ‘sale deed’ - assessee argued merely signing of a tripartite Joint Development Agreement by the Society with M/s. Hash Builders and with M/s. Tata Housing Development Co. Ltd (THDC), did not result into accrual of the alleged capital gain to the assessee - relevant provisions of section 2(47) as also the provisions of section 53A of the Transfer of property Act - HELD THAT:- As decided in SHRISATNAM SINGH KAINTH [2013 (9) TMI 229 - ITAT AMRITSAR] and CHARANJIT SINGH ATWAL [2013 (8) TMI 364 - ITAT CHANDIGARH] When the plots remain unallotted and obviously legal ownership and beneficial ownership belonged to the society. Had the plots been allotted to some members before entering into the JDA then it could have been said that the plots have already been allotted and therefore, the society was not responsible for the same. Once the plots were owned by the assessee obviously the transfer of the same would lead to arising of profit which has to be taxed u/s 45. We are of the opinion that lower authorities have correctly rejected the arguments that income from such plots, if any, should be charged under the head "business profits" because it is a settled law that if an income falls under specific head of income contained in Section 14 under Chapter IV then the same has to be taxed under that head. - Decided against assessee.
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2014 (2) TMI 1392
Disallowance of provision for damaged goods - CIT-A allowed the claim - HELD THAT:- Since Ld. CIT(A) has followed the earlier order of the Tribunal for A.Y. 2005-06 [2010 (7) TMI 1202 - ITAT AHMEDABAD] in assessee’s own case, we are not inclined to interfere with the order of Ld. CIT(A) and the same is hereby upheld. This ground of revenue’s appeal is dismissed.
Disallowance of depreciation on intangible assets in the form of non-compete territory rights - HELD THAT:- CIT-A following the Tribunal decision, A.O. is directed to decide the issue in the light of the final decision of the Hon’ble High Court for A.Y. 2002-03 [2012 (7) TMI 958 - GUJARAT HIGH COURT] This ground of appeal is allowed, subject to the final decision of Hon’ble Gujarat High Court [2012 (7) TMI 958 - GUJARAT HIGH COURT] Since Ld. CIT(A) has decided this ground following the order of the Tribunal for A.Y. 2005-06 in assessee’s own case, we are not inclined to interfere with the order of Ld. CIT(A) and the same is hereby upheld. This ground of revenue’s appeal is also dismissed.
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2014 (2) TMI 1390
Carry forward of Unabsorbed depreciation - treatment to brought forward unabsorbed depreciation claim - HELD THAT:- As decided in PIONEER ASIA PACKING P. LTD. [2007 (11) TMI 285 - MADRAS HIGH COURT] and GENERAL MOTORS INDIA PVT. LTD [2012 (8) TMI 714 - GUJARAT HIGH COURT] by virtue of the provisions of Sec.32 (2), as amended by Finance Act, 2001, unabsorbed depreciation available in the assessment year 1997-98, 1999-00, 2000-01 & 2001-02 could be carried forward and set off during the succeeding years. Accordingly, we hereby hold that in the relevant assessment year, the assessee shall be entitled to set off unabsorbed depreciation carry forward from the earlier years - Assessing Officer is therefore, directed to modify his order accordingly. Thus, this ground raised by the assessee is allowed in its favour.
Interest for borrowed funds - Advances to sister concerns - HELD THAT:- Assessee has own funds far exceeding the advance made to its sister concerns. Further the claim of the assessee that it had transferred accumulate losses to its sister concerns has not been looked into by the Ld.AO, need less to mention that in such case disallowance of interest expense on the premises that interest bearing funds have been diverted would be incorrect. However the following decisions rendered by various higher judiciary has held that if the assessee has own funds exceeding the advances made to sister concerns, then interest expenditure cannot be disallowed on the premises that the assessee has diverted interest bearing fund to its sister concerns.
Considering the above decisions in the case CIT Vs. Reliance Utilities And Power Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT] & in the case CIT Vs. Bharti Televenture Ltd [2011 (1) TMI 326 - DELHI HIGH COURT] which are identical to the facts of the case before us, we are of the opinion that the Ld. Assessing Officer has erred by disallowing the interest expenditure incurred by the assessee on the premises that interest bearing funds have been diverted to the sister concerns. Therefore, we hereby delete the addition made by the Ld. Assessing Officer, which was further confirmed by the Ld. CIT (A) on this issue - Decided in favour of assessee.
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2014 (2) TMI 1388
Disallowance u/s.43B - interest amount ‘paid’ by the assessee - AO held that the term ‘paid’ means that the amount should have been actually paid. Transfer of amount from one account to another account cannot be treated as ‘paid’ thus made the disallowance - HELD THAT:- The interest amount has been paid from the cash credit account of the assessee in which the balance keeps on varying every day depending upon the receipts and payments of the assessee. The embargo put by Explanation 3C and 3D of section 43B is not attracted in the facts of the present case. The interest amount has not been converted into loan or advance. The interest amount has actually been ‘paid’ by the assessee through Overdraft/Cash Credit account. In view of our above findings, the dis-allowance made u/s.43B is set aside and the appeals of the assessee are allowed.
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2014 (2) TMI 1387
Deduction u/s 80IB(10) denied - project was not a housing project as envisaged under section 80-IB(10) - Whether project was not a housing project as envisaged under section 80-IB(10)? - assessee had claimed himself to be ‘developer’ of a plot measuring 14.75 acres alongwtih all basic amenities like roads, parks, street lights, children play area etc - HELD THAT:- An identical claim of deduction had been disallowed by the Assessing Officer in assessment year 2009-10 and the ‘tribunal’has confirmed similar findings of the CIT(A) deleting the same. [2013 (11) TMI 1745 - ITAT CHENNAI] as transpires that in preceding as well as the impugned assessment year, the Assessing Officer had made disallowance of deduction u/s 80IB(10) qua the very project ‘ Chettinadd Enclave’ sought to have been developed by the assessee on similar analogy of reasons (supra).
We find from the tribunal’s order that similar grounds were raised wherein issue of deduction stands decided in favour of the assessee. In these circumstances, by following the order of the ‘tribunal’ in assessee’s own case for the very project in the nature of deduction u/s 80IB(10) of the Act , we see no reason to adopt a different view in the impugned assessment year. Consequently, the CIT(A)’s findings are affirmed. - Decided against revenue.
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2014 (2) TMI 1384
Revision u/s 263 - TDS deduction on foreign agent export commission - AO allowed assessee’s foreign agent commission payments as expenditure without deduction of any TDS - HELD THAT:- Admittedly, the assessee had made payment to its overseas export agent in lieu of getting export orders and did not deduct any TDS qua the said payments. Per Revenue, the assessee was supposed to deduct TDS in question. The assessee places reliance on the circulars of the ‘board’ bearing No.23 dated 23.7.1969, No.163 dated 29.5.1975 and No.786 dated 7.2.2000. In the first circular, the ‘board’ had clarified that a foreign agent of Indian exporter is not liable to pay any income tax in India.
This position continued till the year 2009. It was only in the year 2009 i.e after the impugned assessment year 2008-09 that the ‘board’ decided to withdraw the circular on 22.10.2009. We notice that the hon'ble Delhi high court in the case of CIT vs Angelique International Ltd (supra) has held that the action of the ‘board’ in issuing withdrawal of earlier circulars with effect from 22.10.2009 is only prospective and not retrospective. As a result, we also observe that since the impugned assessment year is 2008-09 i.e well before 22.10.2009, the circular issued in the year 2009 did not have any effect in the assessee’s case.
That being so, the Assessing Officer had rightly followed the circular in allowing the assessee’s foreign agent commission payments as expenditure without deduction of any TDS. Rather, in the case of Faizan Shoes Pvt. Ltd [2014 (1) TMI 440 - ITAT CHENNAI] the co-ordinate bench of the Chennai ‘tribunal’ holds that even in assessment year 2009-10, the circular dated 22.10.2009 does not apply. Thus, we hold that the Assessing Officer had taken the only possible view by following the circular issued by the ‘board’ which provided that in case of foreign agent commission payments the said income could not be taxed in India. In this manner, the argument of the assessee challenging the sole reason stated in the section 263 show cause notice succeeds.
That leaves us with the latter reason in the impugned order that since the Assessing Officer did not carry out any investigation/ enquiry to determine nature of the commission payments and therefore, the CIT has only remitted the matter back to the Assessing Officer to re-examine the issue which causes no prejudice to the assessee. After considering this plea of the Revenue, it emanates from the case file that factually, the assertion is correct. However, in the show cause notice issued by the CIT, there is no such reason of lack of enquiry forthcoming. We make it clear that in section 263 proceedings, the jurisdiction of the CIT is confined to only those issues which form part of the show cause notice. In this manner, the order under challenge traverses beyond the show cause notice. Since we are dealing with a ‘fiscal’ statute, the powers of the Revenue have to be strictly interpreted. Assessee’s appeal is allowed.
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2014 (2) TMI 1383
Addition u/s 68 - unexplained cash credit - assessee has only proved the identity of the company and the details of flow of money through the banking channels and it has failed to prove the credit worthiness of M/s Great Valley P Ltd in terms of sec.68 - contentions of the Ld A.R was that the provisions of sec. 68 cannot be applied to an International Transaction - HELD THAT:- In the case of Pondu Metal and Rolling Mill [2007 (2) TMI 652 - DELHI HIGH COURT], the issue related to the “Share Application Money” received by the assessee therein. In the instant case, the assessee has received loans in the form of “Debentures” and hence, in our view, the ratio of the said decision cannot be applied to the facts of the instant case.
In the case of Russian Technology Centre [2013 (4) TMI 659 - ITAT DELHI] the issue was related to “Share Application money” received from a foreign parent company.However in the instant case, there was no prior approval of Indian Government authorities (if required) and further the assessee has miserably failed to prove the source available with M/s Great Valley Co. Pvt Ltd, i.e., the credit worthiness of the said company with supporting evidences. In fact, the submission of the Ld A.R was that the assessee could not enforce the above said company to furnish the financial details, which appears to be very strange to us. Hence, in our view, the assessee cannot take support of this decision also.
The issue considered in the case of Smt. Susila Ramasamy [2009 (4) TMI 554 - ITAT CHENNAI] was about the applicability of provisions of sec. 69 of the Act on an assessee, who was a Non- Resident Indian. In the instant case, we are concerned with the applicability of the provisions of sec. 68 to an Indian assessee on the loan received by it. Hence, in our view, the assessee cannot take support of the case of Smt. Susila Ramasamy (supra) also.
In the instant case, it is a fact that the assessee did not furnish any material to prove the credit worthiness before the AO. However, before the Ld CIT(A), the assessee has furnished a certificate obtained from M/s Barclays Bank to the effect that the funds were transferred to the assessee company from out of the balance available in a Bank account. It is pertinent to note that the said certificate is very bald in nature, i.e., it did not give any detail about the Bank account, i.e., the Bank account number, the account holder name, when the account was opened, details of dates and amounts of deposit in the said bank account etc. Be that as it may, the fact remains that the said certificate has not been examined by the Ld CIT(A) or by the AO (in the remand proceedings). Whatever may be the worth, the assessee has furnished a certificate obtained from M/s Barclays bank in order to prove the credit worthiness of the foreign company, referred above and hence, in our view, the tax authorities should have examined the same and there after, they should have taken a decision. Hence, in our view, the issue before us needs to be examined afresh at the end of the assessing officer - Appeal of the assessee is allowed for statistical purposes.
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2014 (2) TMI 1381
Addition to value of closing stock on account of CENVAT credit u/s 145A - assessee has been consistently following exclusive method of accounting for valuation of closing stock of excluding the CENVAT - AO revalued the closing stock by including CENVAT/MODVAT credit in closing stocks on the ground that non inclusion of CENVAT credit is not only improper but also cannot depict the true and fair picture of taxable profit of the business - HELD THAT:- Jurisdictional High Court in the case of Mahalaxmi Glass Works P. Ltd [2009 (4) TMI 182 - BOMBAY HIGH COURT] wherein it has been held that to give effect u/s 145A, if there is any change in closing stock at the end of the year there must be necessarily of corresponding adjustment in the opening stock of that year and accordingly directed the AO to calculate disallowance/addition after verification.
Tribunal in the case of Jindal Iron & Steel Company Ltd. [2013 (1) TMI 182 - ITAT MUMBAI] has held that if unutilized MODVAT credit is added to closing stock, then similar adjustment should be made even in opening stock and purchases. The Tribunal further held that from the plain reading of provisions of section 145A, it is evident that for the purpose of valuation of purchase and sale of goods and inventories on account of tax, duty, cess or fee actually paid are incurred by the assessee has to be made. Excise duty component in the form of MODVAT in the raw materials has to be included while valuing the purchases and sales of goods and inventories as it has direct bearing on valuation of stock. The Tribunal in the said decision has considered the decision of the Hon’ble Bombay High Court in the case of Mahalaxmi Glass Works P. Ltd (supra) which has been relied by the Ld.CIT(A). Therefore, following the aforementioned decision of the Tribunal, we modify the direction of the Ld.CIT(A) in such a manner that the issue is remitted back to the file of the AO with the direction to make the adjustments as per section 145A on account of CENVAT credit to the value of purchases/sales of opening and closing stock and accordingly re-compute the addition if any to be made on this issue. Appeal filed by the assessee is allowed for statistical purpose.
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2014 (2) TMI 1379
Set off of the carried forwarded capital loss against the current year long term capital gain - HELD THAT:- The assessee mentioned that these issues stand covered in favour of the assessee by virtue of the judgment of Ace Builders P. Ltd. [2005 (3) TMI 36 - BOMBAY HIGH COURT] and many other decisions of this Tribunal such as (1) Geetanjali Traing Ltd[2013 (3) TMI 194 - ITAT MUMBAI] and Manali Investments [2011 (4) TMI 116 - ITAT MUMBAI] - Some of these decisions were not available to the AO / CIT (A) at the appropriate point of time. Therefore, in our considered opinion, the issue should be remanded to the files of the CIT (A) with a direction to examine the applicability of the said decisions to the facts of the present case and decide the grounds.
MAT Computation - provisions for diminution of the value of investment constitutes an allowable deduction for the purpose of computing the book profits or not? - HELD THAT:- As assessee says issue stands covered by the decision of the ITAT, Kolkata Bench in the case of DCIT vs. Mcleod Russel India Ltd [2013 (4) TMI 315 - ITAT KOLKATA] direct the CIT (A) to examine the said decision and decide the claim of the assessee.
Appeal treated as allowed for statistical purposes.
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