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Showing 1 to 20 of 1748 Records
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2016 (11) TMI 1753 - ALLAHABAD HIGH COURT
Authenticity of the sale deed - entitlement to compensation - Burden of Proof vs. Onus of Proof - Forgery and Fictitious Documents - the court dismissed the suit and ruled in favor of the defendant-respondents for compensation of the disputed land - Section 6(e) of Transfer of Property Act, 1882.
The plaintiffs argued the sale deed was void and forged, while the defendants claimed it transferred their right to compensation.
Whether sale deed transfers disputed land to the purchasers or only right to receive compensation was transferred? - HELD THAT:- Once it is said that the vendors have collected entire compensation of disputed land, this factum that such compensation may have been enhanced in litigation after that was transferred, in our view, will bring the deed in question as transferring "a mere right to sue" and would be hit by Section 6 (e) of Act 1882 - The stipulation contemplates a chance of higher compensation in litigation and intends to transfer the same. This is evidently a mere 'right to sue' and not any interest in the disputed land - the question is answered against defendant-respondents and in favour of appellants.
Whether Sale-deed dated 8.2.1994 is a forged and fictitious document, as claimed by plaintiff-appellants or Court below has rightly held it a genuine document? - HELD THAT:- When a document is registered in the office of Sub-Registrar, thumb impressions and signatures are obtained by Sub-Registrar on its own Register also. Defendant-respondents made no effort to get appropriate record summoned from the office of Sub-Registrar, particularly when document was challenged forged and fictitious, obtained by impersonation. It was also not signed by one of two witnesses as well as author - Court below has erred in law, firstly by stretching burden of proof of the factum of fraud and misrepresentation of aforesaid document on plaintiff-appellants on the ground that no witnesses of document were examined as plaintiffs' witnesses. plaintiff-appellants when challenged document as a forged and fictitious one, they never admitted that any person was accepted by them as a witness to such document. Hence, question of producing such witnesses by plaintiffs could not have arisen. Benefit of document was claimed by defendant-respondents. Hence onus to produce witnesses to prove document lay upon them. There is a distinction between "burden of proof" and 'onus' - question answered in favor of appellants.
Whether Court below has rightly held that defendant-respondent are entitled to payment of compensation of disputed land? - HELD THAT:- There is neither any evidence on record nor otherwise, from which it can safely be inferred that there was any interest or right to receive compensation available on 8.2.1994 which could have been transferred by plaintiff-appellants to defendant-respondents. Moreover when they themselves claimed compensation @ Rs. 400/- per square yard, would have agreed to give up such contest on meager consideration of Rs. 60,000/- is highly improbable unless there is some reason - the question is answered against defendant-respondents.
The judgement and decree, dated 16.9.1998 and 29.9.1998 respectively, passed by Sri Devendra Kumar Jain, XIIth Additional District Judge, Ghaziabad in Original Suit N. 47 of 1996 read with Land Acquisition Reference under Section 30 of Act, 1894 are hereby set side - appeal allowed.
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2016 (11) TMI 1752 - CESTAT DELHI
Refund of service tax - case of petitioner is that invoices produced by them in respect of detention charges which are for storage and warehousing of the goods are not cleared and does not establish that the same are for the detention charges - HELD THAT:- In as much as the legal issue is decided in favour of the assessee, the impugned orders in both the cases is set aside and the matter remanded to the original adjudicating authority for examination of the documents. As the refund claim is involved, we expect the adjudicating authority to do the needful as early as possible and preferably within a period of three months from today. Both the appeals are disposed of in above manner.
Appeal disposed off by way of remand.
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2016 (11) TMI 1751 - ITAT MUMBAI
Nature of expenses - Right to use technical know-how - Disallowance of claim u/s 37(1) and allowing only 1/6th u/s 35AB - HELD THAT:- As decided in own case [2013 (1) TMI 1057 - ITAT MUMBAI] there are overlapping areas between the donations given by the assessee and the business expenditure incurred by the assessee - there can be certain amounts, though in the nature of donations, and nonetheless, these amounts may be deductible under section 37(1) as well. Therefore, merely because an expenditure is in the nature of donation, or, to use the words of the CIT(A), 'promoted by altruistic motives', it does not cease to be an expenditure deductible under section 37(1).
Even if the contributions by the assessee is in the forms of donations, but if it could be termed as expenditure of the category falling in section 37(1), then the right of the assessee to claim the whole of it as a deduction under section 37(1) cannot be defined. What is material in this context is whether or not the expenditure in question was necessitated by business considerations or not. Once it is found that the expenditure was dictated by commercial expediencies, the deduction under section 37(1) cannot be declined - Decided in favour of assessee.
Provision towards post retirement medical benefit - Disallowance u/s 37(1) - HELD THAT:- As decided in [2013 (1) TMI 1057 - ITAT MUMBAI] for AYs 2000-01, 2001-02 and 2002-03 wherein held leave encashment is not a contingent liability. Taking the same cue, that post retirement medical benefit is also a liability which gets attached to the company the moment, the service contract is signed, we hold that the revenue authorities erred in disallowing the provision under this head. Having held so in principle, neither we have been able to gather the year wise breakup of the Actuarial valuation made by the Actuary as un 31.03.1997, nor the Senior Counsel, was able to apprise us on the valuation, pertaining to the year under consideration.
Taking into account the above reason, we deem it fit to restore the issue to the file of the AO, who shall call for the year wise valuation and then allow the claim accordingly. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to allow the claim of provision after verification of the Actuary's report pertaining to the current year. Thus we set-aside the matter to the file of AO to verify the Actuarial Valuation Report and then allowed the claims of assessee in accordance with the order supra
Notional disallowance u/s 14A against Income earned from an AOP - CIT(A) while considering this ground of appeal observed that while passing order for AY 1999-2000 confirmed the disallowance @ 3% of tax free interest - HELD THAT:- The assessee received exempt income from AOP, the assessee was required to associate with the activities of PIL (AOP) to spend its resources for its successful functioning, therefore, section 14A is squarely applicable but the CIT(A) descended regarding the interest expenditure attributable to earn exempt income and concluded that assessee invested out of composite fund and associated in functioning of AOP with its resources and granted the partial relief. We have seen that during the year, the assessee has received an amount of Rs. 1,62,85,873/- as a share of profit from PIL. PIL is being assessed separately as per the provisions of section 86 and as per proviso of section 86, the share of Member shall not be included in the total income as the AOP is charged at the maximum marginal rate, thus, no disallowance for earning from AOP/PIL was warranted, thus, we direct the AO to delete the entire addition.
Disallowance of deduction claimed u/s 80M - HELD THAT:- The assessee has made no expenses in relation to dividend income. Neither the AO nor the CIT(A) brought on record the actual expenditure, if any incurred by assessee in relation to dividend income. The assessee is claiming throughout that the amount of investment was out of surplus available with them, thus, considering the peculiarity of the case, the disallowance made by AO and sustained by ld. CIT(A) are deleted. In the result, this ground of appeal raised by assessee is allowed.
Correct head of income - Surrender of Tenancy rights treated as Income from other sources instead of capital Gain - HELD THAT:- There is no dispute that the assessee was in possession of a Flat in Alt View Co-op. Housing Society and the possession of assessee was protected under the provisions of Rent Control Act. The assessee received a sum on account of surrender of Tenancy right to its owner. It is settled legal position that amount received on account of surrender of tenancy right is a Capital Gain and not to be taxed as business receipt. Thus this ground of appeal is also allowed in favour of the assessee.
Nature of expenses - Expenditure on Railway Siding facilities - Disallowance u/s 37(1) - HELD THAT:- The Hon’ble Guwahati High Court in CIT vs. Bongaigon Refinery & Petro Chemicals P. Ltd. [1996 (6) TMI 64 - GAUHATI HIGH COURT] while dealing with almost on similar grounds base on similar facts held that expenditure as incurred on construction of Railway Track and siding is revenue expenditure and not a Capital expenditure. Thus, respectfully following the decision of Hon’ble Gujarat High Court, this ground of appeal is allowed in favour of assessee.
Denial of interest claimed u/s 36(1)(iii) - assessee argued that though the section was amended only from AY 2004-05 and was not applicable for the order under consideration and relied upon the decision of CIT vs. Core Health Care Ltd. [2008 (2) TMI 8 - SUPREME COURT] - CIT(A) while considering this ground concluded that capitalized interest is an integral part of cost of capital work-in-progress and sustained the disallowance - HELD THAT:- The Hon’ble Supreme Court in DCIT vs. Core Health Care Ltd. [2008 (2) TMI 8 - SUPREME COURT] held that section 36(1)(iii) is attracted when the assessee borrows the capital for the purpose of his business. It does not matter whether capital is borrowed in order to acquire a revenue asset or a capital asset, because all that the section requires is that the assessee must borrowed the capital for the purpose of his business. This dichotomy between the borrowing of a loan and actual application thereof in the purchase of a capital asset, seems to proceed on the basis that a mere transaction of borrowing does not, by itself bring any new asset of enduring nature into existence, and that it is the transaction of investment of the borrowed capital in the purchase of a new asset which brings that asset into existence. The transaction of borrowing is not the same as the transaction of investment. Thus assessee is entitled for deduction u/s 36(1)(iii).
Establishment expenditure - Disallowance u/s 37(1) - AO has treated the Administrative Expenses incurred on Engineering Project and the ld. CIT(A) while considering this ground of appeal concurred with the finding of AO - HELD THAT:- Hon’ble Supreme Court in Tuticorin alkali Chemicals and Fertilizers Ltd. v. Commissioner of Income-Tax [1997 (7) TMI 4 - SUPREME COURT]] held that when the question is whether a receipt of money is taxable or not, or whether certain deduction from receipt are permissible in law or not. The question has to be decided according to the principle of law and not in accordance with the Accounting practice.
Accounting Practices cannot be override section 56 or any other provisions of the Act. The assessee incurred expenses on various personnel/ employee in the project for supervision and monitoring the various project and marketing allocation and refineries which is certainly allowable as business expenditure u/s 37(1) of the Act. Expenses were made on account of salary, Dearness Allowance (DA), Conveyance Expenses, postal charges, bank charges, rent for housing accommodation, Motorcar etc. which is certain of revenue expenditure. Thus, the Ground No.8 raised by the assessee is allowed.
Levy of interest u/s 234D - assessee argued that the assessee is entitled to interest u/s 244A on the excess tax paid @ ½ % per month from 1st day of April to the date on which refund is granted - HELD THAT:- We have seen that section 234D was introduced w.e.f. 01.06.2003. Thus, the assessee is entitled for the interest as per section 234D w.e.f. 01.06.2003. Thus, the AO is directed to calculate the interest in accordance with the provisions of section 234D of the Act. Thus, this ground of appeal is allowed for statistical purpose
Deduction u/s 35(1)(ii) Contribution to LERC - HELD THAT:- As decided in [2013 (1) TMI 1057 - ITAT MUMBAI] identical grounds of appeal was allowed in favour of assessee directing the AO to examine the issue and allowed the claim in accordance with the provisions of law. Thus, this ground of appeal is allowed as mutatis mutandis passed by Tribunal. In the result, this ground of appeal is allowed for statistical purpose.
Admission of additional ground - Deduction u/s 37(1) towards Detailed Feasibility study expense - assessee argued that the assessee omitted to claim the relief in return of income - HELD THAT:- We have seen that the similar grounds of appeal was raised by the assessee in AY 2001-02 by way of additional ground and the same was not admitted in [2013 (1) TMI 1057 - ITAT MUMBAI]. Thus, keeping in view the order of earlier years, this ground of appeal is not admitted. Thus, this ground of appeal is rejected as un-admitted.
Nature of expenses - payment to club membership - HELD THAT:- This Ground of Appeal is no more res-integra on the basis of series of judgment on various High Courts held that Club Membership Fees for employees incurred by assessee is Business Expenses u/s 37 - Decided against revenue.
Adoption of value of power generated by the concerned captive power plant for the purpose of calculating deduction u/s 80IA - AO was not satisfied with the explanation held that APSEB would not be power at the rate from power producer and thereafter presumed margin @ 15% on the sale price of Rs.3.60 per unit charged by APSEB and accordingly reduced 15% from the value of electricity shown by assessee - HELD THAT:- CIT(A) while considered this Ground of Appeal, concluded that AO has not disputed that APSEB sales powers to its customer @ 3.60 per unit as assessee has deleted the rate to the value of power generated and consumed internally, there is no reason for the AO to doubt the assessee and the AO has needlessly made the exercise for estimating the profit of 15%.
CIT(A) further concluded that assessee has reasonably adopted the rate of value of power generation by assessee whereby and cancelled the same and direct the AO to adopt the value of power generated by assessee as disclosed by it for the purpose of calculating the deduction. We have seen that the order of ld. CIT(A) is based on sound reasoning and does not require our interference thus, we affirmed the order of ld. CIT(A). In the result the Ground of Appeal raised by Revenue is dismissed.
Deduction on Leave Encashment u/s 43B - lower authorities has not considered the claim of the assessee holding that the claim was filed without filing the revise return of income - HELD THAT:- Hon’ble Apex Court in Goetz India Ltd. [2006 (3) TMI 75 - SUPREME COURT] held that whenever the assessee makes a mistake or omitted to lodge a legitimate claim , the appellate authority be it first appellate authority or the second appellate authority, has vide power to entertain the new grounds of appeal. Respectfully following the decision of Hon’ble Apex Court which has a binding precedent by virtue of Article 141 of the Constitution of India, we admits the grounds of appeal raised by the assessee and restore this ground of appeal to the file of AO to reconsider it afresh and pass order in accordance with law.
Valuation of raw-material on an eligible business u/s 80IB (9) - assessee has given sufficient documentary evidence in support of their claim for the cost of VGO considered by them for inter-unit product purchased cost which was much higher as compared to market value of VGO - HELD THAT:- As decided by CIT(A) since the market price is lower than the value adopted by the appellant there is no reduction of cost resulting in inflation of the profit of the eligible unit and thereby a claim of deduction under section 80I. In fact by adopting the value which is substantially higher than the market price, the appellant has increased its cost, reduced the profits of eligible unit and thereby has claimed a lesser reduction under section 80 IA then what could have been calculated if market price of the product was adopted. In such a scenario there was no region for the AO to disturb the calculation made by the appellant
We have seen that the ld Commissioner (Appeals) granted the relief after considering the entire fact related with the claim of assessee. We do not find any reason to differ with the finding of learned Commissioner (Appeals). Thus this ground of appeal is dismissed.
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2016 (11) TMI 1750 - ITAT RAJKOT
Revision u/s 263 - interest not offered to tax on accrual years - as submitted interest was offered to tax by the assessee during this A.Y. 2011-12 in spite of the fact that the same advance made by the assessee still exist as outstanding - HELD THAT:- We noticed that in this case there is a history of interest receipt which is a huge amount in the preceding year on the similar advances made by the assessee and inspite of this the AO had not made any inquiry and verification that no such interest was shown as accrued in the year under consideration in spite of the fact that the advance is still remained outstanding during this Assessment Year. AO has not made any enquiry on this issue during the course of assessment proceedings and even during the course of proceedings u/s. 263 the assessee failed to furnish any relevant supportive evidences and agreement to justify that such interest was not be charged during the year under consideration.
The case of Commissioner of Income Tax vs. Arihant Avenues & Credit Ltd (2014 (10) TMI 790 - GUJARAT HIGH COURT) relate to the facts where borrowed money without interest was given as interest free advance. In view of the above facts and findings, the ratio of the judgments quoted are not applicable to the facts of the assessee’s case. We considered that the AO has passed the order without making inquiry and verification as to why no interest has been offered to tax on accrual years.
Deduction claimed u/s. 80IA - We find that assessee has started to operate the eligible business from 12-03-2007 relevant to AY 2007-08 and assessee has not claimed any deduction u/s. 80IA of the Act before A.Y. 2010-11 when he has opted consequent ten years out of fifteen years for claim of deduction u/s. 80IA. These informations and facts are available in the assessment record of the assessee. We are not inclined to uphold the order of the Ld. Pr. Commissioner of Income Tax on the second issue regarding deduction u/s 80IA(5) of the act.
Assessee’s appeal is partly allowed.
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2016 (11) TMI 1749 - SUPREME COURT
Validity of order of punishment of compulsory retirement - Rule 14 of CCS (CCA) Rules, 1965 - Seeking grant of medical leave with permission to leave the station - principles of natural justice - HELD THAT:- Both the learned Single Judge and the Division Bench have heavily relied on the fact that before forwarding the copy of the report by letter dated 02.04.2008 the Disciplinary Authority-cum-Whole Time Members have already formed an opinion on 25.02.2008 to punish the writ Petitioner with major penalty which is a clear violation of principle of natural justice.
Before making opinion with regard to punishment which is to be imposed on a delinquent, the delinquent has to be given an opportunity to submit the representation/reply on the inquiry report which finds a charge proved against the delinquent. The opinion formed by the Disciplinary Authority-cum-Whole Time Members on 25.02.2008 was formed without there being benefit of comments of the writ Petitioner on the inquiry report. The writ Petitioner in his representation to the inquiry report is entitled to point out any defect in the procedure, a defect of substantial nature in appreciation of evidence, any misleading of evidence both oral or documentary. In his representation any inputs and explanation given by the delinquent are also entitled to be considered by the Disciplinary Authority before it embarks with further proceedings as per statutory rules.
There was violation of principle of natural justice at the level of Disciplinary Authority when opinion was formed to punish the writ Petitioner with dismissal without forwarding the inquiry report to the delinquent and before obtaining his comments on the inquiry report - the order of the High Court setting aside the punishment order as well as the Appellate order has to be maintained.
Thus, present is the case where the High Court while quashing the punishment order as well as Appellate order ought to have permitted the Disciplinary Authority to have proceeded with the inquiry from the stage in which fault was noticed i.e. the Stage Under Rule 15 of Rules - sufficient time has elapsed during the pendency of the writ petition before learned Single Judge, Division Bench and before this Court, however, in view of the interim order passed by this Court dated 31.08.2015 no further steps have been taken regarding implementation of the order of the High Court. The ends of justice be served in disposing of this appeal by fixing a time frame for completing the proceeding from the stage of Rule 15.
Appeal allowed in part.
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2016 (11) TMI 1748 - ITAT BANGALORE
TP Adjustment - comparables selection - functinall similarity - HELD THAT:- Bodhtree Consulting Ltd. - Since the Tribunal has examined the profile and datas of Bodhtree Consulting Ltd. and has come to the conclusion that this company cannot be taken as good comparable for computing the ALP, we find no justification in re-examining the issue again. Accordingly, exclusion of Bodhtree Consulting Ltd. from the list of comparables upheld.
Exclusion of this company i.e., Exensys Software Solution Ltd. from the list of comparables considering the fact that unusual profits arose out of an extra ordinary event of amalgamation.
Syassaris Software P. Ltd. engages itself in products and services as well as software training, it cannot be considered as a comparable of the Appellant.
Thirdware Solutions Ltd. be excluded as information furnished by the said company that though the said company is also into product development, there are no software products that the company invoiced during the relevant financial year and the financial results are in respect of services only. Thus, it is clear that there is no sale of software products during the year but the said company might have incurred expenditure towards the development of the software products.
Geometric Software Solutions Company Ltd. issue should also go back to the TPO to adjudicate the justification of its exclusion on the point of RPT filter.
Tata Elxsi Ltd. cannot be included in the list of comparables as it is functionally different and has incomparable size to that of the assessee.
iGate Global Solutions Ltd., Flextronics Software Systems Ltd., L&T Infotech Ltd., Satyam Computer Services Ltd. and Infosys Technologies Ltd., be excluded as their turnover exceeds 10 times of the turnover of the assessee.
Four Soft Ltd. - Tribunal in the aforesaid order has applied RPT filter and excluded this company from the list of comparables, but RPT of this company was not mentioned in the order. Therefore, in the absence of complete details, it is not proper to follow the order of Tribunal blindly. We therefore set aside this issue to the file of TPO/AO to examine the justification of its inclusion/exclusion by applying the RPT filter in the light of available datas of this company.
VJIL Consulting Ltd. - In the absence of clear details, the TPO rejected this comparable. Now the details of this comparable are available and the CIT(A) has included the same in the list of comparables without confronting the audit report and datas to the TPO. We therefore find it proper to remit the matter to the TPO to reconsider the inclusion of this comparable in the list of comparables in the light of the order of the Tribunal in the case of Qualcomm India Pvt. Ltd. (supra). Accordingly adjudication of this comparable is restored to the TPO.
Melstar Information Technology Ltd - We restore the matter to the file of AO/TPO to examine the claim of inclusion of this comparable in the light of annual report and other details.
Deduction u/s. 10A in respect of Unit–II custom bonding licenses were obtained only on 29.1.2002. - CIT(A) allowed deduction - HELD THAT:- We have carefully examined the order of CIT(Appeals) on this issue and we find that the CIT(Appeals) has examined this issue in the light of various judicial pronouncements of different Benches of the Tribunal and finally having relied upon the order of Tribunal in assessee’s own case for the AYs 2002-03 to 2004-05, the CIT(Appeals) has held that the company is eligible to claim deduction u/s. 10A in respect of Lara Unit income and allowed the relief. Since the CIT(Appeals) has decided the issue following the order of Tribunal which was later on confirmed by the jurisdictional High Court [2014 (11) TMI 1277 - KARNATAKA HIGH COURT] we find no infirmity in the order of CIT(Appeals), accordingly we confirm the same.
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2016 (11) TMI 1747 - CESTAT HYDERABAD
Confiscation of the iron ore consignments - imposition of redemption fine under Section 25 of the Customs Act, 1962 - penalties under Section 114(i) ibid - HELD THAT:- The Board vide Circular No. 4/2012-Cus. dated 17-2-2012, in the wake of several references received, inter alia, clarified In light of the observation by the Apex Court that export duty is chargeable according to Fe contents, and to maintain uniformity all over the customs houses, it is clarified that for the purpose of charging of export duty the assessment of Iron ore for determination of Fe contents shall be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents.
In the light of the Board's Circular, the issue now stands gone in favour of the appellant - The impugned order is not sustainable and liable to be set aside - Appeal allowed.
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2016 (11) TMI 1746 - CESTAT CHENNAI
Refund claim - confirmation of the adjudication order without appreciating the difficulties of the appellant - Rule 5 of Cenvat Credit Rules, 2004 - HELD THAT:- The matters are remanded to learned adjudicating authority to grant fair opportunity of hearing to the appellant for pleading both on facts and law as well as evidence. Considering the same, the authority shall resolve the dispute at the grass root.
Appeal remanded to learned adjudicating authority.
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2016 (11) TMI 1745 - MADRAS HIGH COURT
Suspension order - deemed suspension - respondent would submit that as a criminal case is pending against the petitioner, the suspension is a deemed suspension and therefore, that order cannot be challenged in this writ petition - HELD THAT:- In the case of AJAY KUMAR CHOUDHARY VERSUS UNION OF INDIA THROUGH ITS SECRETARY & ANR. [2015 (6) TMI 592 - SUPREME COURT], the Supreme Court has come down heavily on this type of provisions which allow the competent authorities to extend the period of suspension for indefinite periods after periodical reviews. In the said case, Ajay Kumar Choudhary, the appellant had initially been suspended by the Suspension Order dated 30.9.2011. This suspension was extended on 28.12.2011 for a further period of 180 days. Then, with effect from 26.6.2012 the suspension was extended for another period of 180 days. Thereafter, the third extension of his suspension was ordered on 21.12.2012, but for a period of 90 days. It came to be followed by the fourth suspension for yet another period of 90 days with effect from 22.3.2013. Thus, he continued to be under suspension continuously from 30.09.2011.
The order of suspension dated 11.09.2014 is hereby revoked and the respondent is directed to post the petitioner in any one of the non-sensitive posts. The respondent is also directed to conclude the enquiry within a period of four months from the date of receipt of a copy of this order. The enquiry shall proceed dehors the pendency of the criminal case.
Petition allowed.
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2016 (11) TMI 1744 - ITAT MUMBAI
Income taxable in India - sum received by the assessee from the Indian customers - to be taxed as ‘royalty’ in India or not? - assessee company is engaged in the business of providing international communication network connectivity/ facility to various telecom operators around the world and earned revenue from the Indian customers, mainly from providing the “Voice Services” outside India - as per AO assessee not mainly providing standard facility but it is actively providing the usage of its typical hardware and software proprietary product to facilitate and leverage the core business of its customers. Thus, the usage of such facilities amounts to usage of actual proprietary rights - HELD THAT:- As decided in assessee own case [2016 (4) TMI 520 - ITAT MUMBAI] in the AY 2009-10 merely because the provision of the service may require technical input by the person providing the service, it cannot be said that technical knowledge, skills, etc. are made available to the person purchasing the service. As to what are the connotations of 'making the technology available to the recipient of technical services', as is appropriately summed up in protocol to Indo-US DTAA, "generally speaking, technology will be considered 'made available' when the person acquiring the service is enabled to apply the technology." In the case before us, no services are made available in the sense that the recipient of service is enabled to apply the technology, and do the same work without recourse to the service provider. There is no transfer of technology here, and in that sense technical services are not made available.
The authorities below were in error in holding that the receipts from Indian entities on account of connectivity charges, are taxable in India. We direct the Assessing Officer to delete the same - Decided in favour of assessee.
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2016 (11) TMI 1743 - SC ORDER
Maintainability of petition - defects in the petition - HELD THAT:- Four weeks' time is granted to the learned counsel for the petitioner to cure the defects as pointed out by the Registry, failing which, the Special Leave Petition shall stand dismissed for non-compliance without further reference to the Court.
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2016 (11) TMI 1742 - ITAT PUNE
Determination of quantum of suppressed production / sale of TMT bars - estimating gross profit @ 4% on suppressed sale - HELD THAT:- As in the absence of any evidence collected by the AO of alleged removal of goods without payment of Excise duty, merely on the basis of estimation of alleged suppressed production in earlier years, there is no merit in making any addition in the hands of assessee.
We delete addition made in the hands of assessee by the CIT(A) to the extent of 4% of the said alleged production. Accordingly, ground of appeal raised by the assessee against confirming the addition made on account of suppression of production by applying GP rate of 4% on the alleged production of sale are allowed. Further, the ground of appeal raised by the Revenue against the order of CIT(A) in quantifying the suppressed production @ 4% and deleting the addition of working capital is dismissed.
Whether any further expenses on account of manufacturing and administration are to be allowed against unaccounted production worked out? - There is no merit in the ground of appeal raised by the Revenue in this regard as no addition on estimate basis is upheld in the hands of assessee. The ground of appeal No.2 raised by the Revenue is thus, rejected.
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2016 (11) TMI 1741 - ITAT PUNE
Validity of assessment u/s 153A - incriminating material was found or not? - HELD THAT:- We find from the copy of the Panchnama that lot of loose papers marked as per Bundle No.1 were found from the premises of the assessee. Apart from the above a pendrive was also found. Therefore, it cannot be said that no incriminating documents were found during the course of search.
Assessee also could not justify that no incriminating documents were found. Under these circumstances, we find no merit in the additional ground raised by the assessee. Accordingly, the additional ground raised by the assessee is dismissed.
Validity of the assessment order passed u/s.153A - period of limitation - HELD THAT:- Assessee has filed return in response to notice u/s.153A . He has also given a finding that the order has been made prior to the end of 21 months period as envisaged in section 153(1)(a) of the I.T. Act. The assessee has failed to demonstrate during the appeal proceedings that the said assessment order has not been made prior to 30-12-2011. No concrete evidence in this regard was produced before the CIT(A) to justify that the despatch of the order have been made after 30-12-2011. Nothing was brought before us to take a contrary view than the view taken by the Ld.CIT(A) while dismissing the ground raised by the assessee on this issue. Under these circumstances we find no merit in the above ground raised by the assessee.
Undisclosed income of the assessee - unaccounted generation of cash - reliance on statement as recorded u/s. 132(4) of C&F Agent - element of threat or coercion while recording the statement u/s. 132(4) - as argued denial of principles of natural justice as the copy of the statement u/s.132(4) recorded of Shri Sohan Raj Mehta [ C&F agent] was not supplied to the assessee and opportunity to cross examine Shri Sohan Raj Mehta was also not given - HELD THAT:- No addition can be made in the hands of the assessee on the basis of papers found in the premises of third party. Assessee being a small taxpayer, some evidence should have been found from the office or residence of the assessee to show that in fact he has received such huge amount. Similarly, the statement of Mr. Rasiklal M. Dhariwal [Company owner where Shri Sohan Raj Mehta, C&F agent employed] is contrary to the finding of the Department. It is also the submission of the Ld. Counsel for the assessee that different Benches of the Tribunal under identical facts and circumstances have deleted the addition made by the Assessing Officer on the basis of notings found from the premises of Mr. Sohan Raj Mehta.
We find identical issue had come up before the Tribunal in the case of Shri Vinit Ranawat [2015 (6) TMI 608 - ITAT PUNE] as deleted the addition as held he search party during the course of search at the premises of the assessee has not found any evidence whatsoever to substantiate that the assessee has in fact received any amount either party. No unaccounted asset, investment or loose paper evidencing such huge receipt has been found - the query raised during the course of search that the authorised officer has treated the same as “short term advance” given to the assessee. Therefore, we find some force in the submission of assessee that if the amount is a short term advance the question of the same constituting income in the hands of the assessee does not arise. Decided in favour of assessee.
Addition made to income from house property - determining the annual value of Mahabaleshwar property - HELD THAT:- After claiming the statutory repairs u/s. 24 and municipal taxes he determined the Annual value of the Mahabaleshwar house property - We find the Ld.CIT(A) following his order for A.Y.2005-06 deleted the addition made by the AO and thereby allowed the ground raised by the assessee determining the annual value at Rs. 25,000/-. Since the Ld.CIT(A) while deciding the issue has followed his order for A.Y. 2005-06 on the very same property and since nothing contrary was brought to our notice against the order of the CIT(A) for A.Y. 2005-06. Therefore, we find no infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld and the ground raised by the assessee is dismissed.
Deduction u/s. 80IA(4) - project "Sai Trinity" - preconditions for claiming deduction under Industrial Park Scheme 2002 - assessee admitted to withdrawn the claim during search action - HELD THAT:- As considering the amendment of rule 18C of the Rules made w.e.f. 01.08.2008 where an undertaking begins to develop an Industrial Park is also eligible for the deduction so long as the development is otherwise complete within the period specified in the Scheme as well as it fulfills the conditions envisaged in the Scheme.
There is no justification for the denial of deduction nu/s 80-IA(4)(iii) of the Act in the instant assessment year with regard to the profits earned by the assessee from Industrial Park - we set-aside the order of the CIT(A) and direct the AO to allow the deduction made u/s 80IA(4)(iii).
Addition on account of cash seized from the appellant - AO had rejected the appellant’s sworn affidavit explaining the source and the evidence supporting withdrawal from his bank account summarily - CIT rejected the claim of the assessee trust on the ground that the same was an afterthought since no explanation was furnished during 132(4) statement - HELD THAT:- Nothing plausible was brought to our notice to substantiate with the source of Rs. 33 lakhs so as to take a contrary view than the view taken by the CIT(A). The assessee in our opinion has miserably failed to substantiate with cogent evidence that the amount belong to the trust and the amount of Rs. 10,24,000/- drawn from the Cosmos bank account was available with him. Similarly, nothing was brought to our notice to substantiate the availability of Rs. 74,000/- with the assessee and his family members. We find the Ld.CIT(A) has given valid and cogent reasons while dismissing the ground raised by the assessee on this issue. Under these circumstances and in absence of any contrary material brought to our notice, we do not find any infirmity in his order on this issue. Accordingly, the same is upheld and the ground raised by the assessee is dismissed.
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2016 (11) TMI 1740 - DELHI HIGH COURT
Appointment of Arbitrator - dispute between the petitioner and respondent no. 2 to the Arbitrator to be appointed by the Delhi International Arbitration Centre and consequent notice issued requiring the petitioner to suggest five names from the DSE panel of Arbitrators for being appointed as an Arbitrator - HELD THAT:- As decided in Steel Authority of India & Anr. Vs. Micro Small Facilitations Council [2010 (8) TMI 1100 - BOMBAY HIGH COURT] procedure for arbitration and conciliation is precisely the procedure under which all arbitration agreements are dealt with. It cannot be said that because Section 18 provides for a forum of arbitration an independent arbitration agreement entered into between the parties will cease to have effect. There is no question of an independent arbitration agreement ceasing to have any effect because the overriding clause only overrides things inconsistent therewith and there is no inconsistency between an arbitration conducted by the Council under Section 18 and arbitration conducted under an individual clause since both are governed by the provision of the Arbitration Act, 1996.
Issue notice. Notice is accepted by learned counsel appearing for respondent no. 1. Notice shall issue to respondent no. 2, returnable on 31.03.2017.
Till the next date of hearing, the operation of the order dated 16.06.2016 and the notice dated 07.10.2016 shall remain stayed.
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2016 (11) TMI 1739 - ITAT DELHI
Applicability of Section 35ABB to license fee and spectrum charges - HELD THAT:- Issue is covered by the decision of the ITAT Delhi Bench in assessee’s own case in respect of A.Y. 2008-09 [2016 (5) TMI 34 - ITAT DELH] wherein held that the expenditure incurred towards licence fee is partly revenue and partly capital. Licence fee payable upto 31st July, 1999 should be treated as capital expenditure and licence fee on revenue sharing basis after 15th August, 1999 should be treated as revenue expenditure. Thus capital expenditure is qualified for deduction as per Section 35ABB of the Act in the said case as per the finding of the Hon’ble High Court. Thus the said issue is decided in favour of the assessee.
Lease rent paid to IBM - HELD THAT:- This issues covered in favour of the assessee by the decision of the ITAT Delhi Bench in assessee’s own case for A.Y. 2008-09 [2016 (5) TMI 34 - ITAT DELH] wherein the Tribunal held that the service cum lease agreement between the assessee and IBM as well as Nortel clearly lays liability on IBM and substance of the transaction suggests that the beneficial ownership remained with IBM and not with assessee and therefore the assessee had rightly claimed the entire lease rent paid by it to IBM.
TDS u/s 194H - discount allowed to distributors on the sale of prepaid cards which carry “Right to Use of Airtime” - HELD THAT:- Addition under Section 40(a)(ia) has to be deleted as the assessee was not in default u/s 201 of the Act in respect of applicability of Section 194H - The Assessee company was carrying out telecom business in the Rajasthan Circle and NESA. The Jaipur Bench of ITAT held that the assessee is not in default in Assessment Year 2004-05 to 2008-09 and Assessment Year 2009-10.
Similarly in the case of assessee itself has held that assessee to be not in default u/s 194H of the Act. Thus no tax was determined as deductible under Chapter XVIIB. Computational provisions of Section 40(a)(ia) cannot operate if machinery provisions of Chapter XVII-B – Section 201 read with Section 194H of the Act are not applicable.
TDS u/s 194J - Payment made by the assessee company for roaming charges to other telecom service providers - HELD THAT:- Jaipur Bench of ITAT recorded a finding in [2015 (7) TMI 175 - ITAT JAIPUR] held that these charges are not fees for rendering any technical services as envisaged in Section 194J - Once the order u/s 201(1) of the Act is set aside then the issue related to Section 40(a) (ia) does not sustain. Thus the disallowance under Section 40(a)(ia) of the Act in respect of free airtime to distributors and roaming charges by the Assessing Officer does not sustain - Decided in favour of assessee.
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2016 (11) TMI 1738 - SUPREME COURT
Public Servant or not - Respondent who was appointed as licenced surveyor Under Section 18A of the Karnataka Land Revenue Act, 1964 - Prevention of Corruption Act, 1988 - difference of opinion expressed by the different Benches of the High Court and, therefore, the matter was referred to the larger Bench - Division Bench in [2011 (11) TMI 872 - KARNATAKA HIGH COURT] resolved the issue by holding that such a licenced surveyor would be treated as a 'public servant' as defined Under Section 2(c) of the Prevention of Corruption Act, 1988.
HELD THAT:- Such a licensed surveyor is to be treated as public servant. For this purpose, the view taken by the Division Bench is agreed upon. It is mentioned that different Single Judge Benches of the Karnataka High Court had conflicting views and, for this reason, the matter was referred to the Division Bench which has been answered, by the judgment [2011 (11) TMI 872 - KARNATAKA HIGH COURT] holding licensed surveyor to be a public servant Under Section 2(c) of the Prevention of Corruption Act. For this purpose, the High Court, after taking note of the provisions of Section 128 and 131 of the Act, came to the conclusion that these surveyors discharge statutory duty of preparing survey sketches. Such a function was earlier performed by the surveyors of the Survey Department appointed by the State Government. As these Government surveyors were over-burdened with the work, Karnataka Land Revenue Act was amended by inserting Section 18A therein and the work was assigned to these licensed surveyors. All the activities of the licensed surveyors relating to discharging of statutory duties are controlled by the Survey Department of the State Government.
This legal position is curled out from Rule 46-A to 46-K of the Karnataka Land Revenue Rules, read conjointly with Sections 18-A, 128 and 131 of the Act. The aforesaid facts and legal position unambiguously leads to the conclusion that these licensed surveyors are different from those private surveyors who have no license from the State Government. Once survey report is prepared by these persons, the same is duly acted upon, on the basis of which Government functionaries take further action. It is, thus, statutory work of preparing survey sketches which is bestowed upon these licensed surveyors and thus, they are performing statutory duty/public functions.
Obviously, in the duties that are to be discharged by these public surveyors, the State or the public has interest therein. It is more so, when these public surveyors are bound by the terms of their office as licensed surveyors, viz., the terms on which they are given license by the Government.
Appeal dismissed.
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2016 (11) TMI 1737 - SUPREME COURT
Direction to consider the candidature of the Respondent for selection and appointment as Teacher (Primary) in MCD Schools by giving him age relaxation upto 32 years - HELD THAT:- After rejecting the contentions on merits and upholding the validity of the Recruitment Rules, the Court went into the issue of hardship because of sudden reduction in the upper age limit and only on that ground one time relaxation was given to the Petitioners in the said petition. A direction was given to permit all those candidates who had completed the ETE course either in the year 2006 or 2007 or 2008 to appear in the examination. Thus, this was one time relaxation given for the examination which was to be conducted in the year 2008, in order to ameliorate the hardship.
Once, we understand the contours and scope of the judgment and directions, it becomes abundantly clear that the said judgment of the High Court in the case of Sachin Gupta v. DSSSB and Ors. decided on 28.08.2008 cannot be made applicable for all times. The Respondent herein was not the candidate in the recruitment to the said post in the year 2008, On the contrary, he applied for the post pursuant to the advertisement published in the year 2009. In the impugned judgment the High Court has failed to consider the aforesaid analysis of its earlier judgment in Sachin Gupta's case.
Appeal allowed.
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2016 (11) TMI 1736 - ALLAHABAD HIGH COURT
Victim as contemplated by Section 2 (wa) of Indian Penal Code - Locus standi (the right or capacity to bring an action or to appear in a court/direct connection with the offence and only that person can file an application before court), to challenge the order - right to prefer appeal under the proviso of section 372 of Indian Penal Code - HELD THAT:- What we find from a reading of the judgments of various High Courts is that all the judgments deal with definition of 'victim' in respect of an offence of murder without considering the impact of the nature of an offence of which one is a victim. There are various forms of offences provided under Indian Penal Code as well as other Special Laws. An offence may be against body, mind, property, etc. In that context injury caused by the offence would vary. Further, there may be crime against society, which can be termed as a victim less crime because there is no victim in particular.
In the case of Subramanian Swamy Vs. Raju, [2013 (8) TMI 1174 - SUPREME COURT], the petitioner, in a public interest litigation had sought an authoritative pronouncement on the true purport and effect of different provisions of the JJ Act so as to take a juvenile out of the purview of the said Act. The High Court had declined to answer the question raised on the ground that the petitioner had an alternative remedy under the JJ Act against the order as may have been passed by the Board.
The inevitable conclusion is that remedy of appeal is a statutory remedy and powers of Appellate Court under Code of Criminal Procedure is an ordinary appellate power, which is regulated by the provisions meant for appeal against acquittal/conviction under Chapter XXIX (Section 372 to 394) of the Code.
Victim - HELD THAT:- The victim means the actual sufferer of offence (receiver of harm caused by the alleged offence) and no person other than actual receiver of harm can be treated as victim of offence, so as to provide him/ her a right to prefer appeal under the proviso of section 372. In absence of the direct sufferer or in a case where the direct sufferer suffers a disability his or her legal heir or guardian would qualify as a victim.
Legal heir of actual Victim under Section 2 (wa) - HELD THAT:- The expression “Legal Heir” has to be understood in its ordinary or natural sense. That is if any person is able to establish his status as “heir” recognized by law, he can be termed as “Legal Heir” and the preferences / restrictions / categories provided under any statute / personal law governing succession/ inheritance will have no consequence. This interpretation of expression “Legal Heir” would not be a result of liberal construction but would be a consequence of ordinary or natural meaning of the expression “Legal Heir”.
Guardian of Actual Victim under Section 2 (wa) - HELD THAT:- The word “Guardian” includes a Judicial Guardian (appointed by law), a legal Guardian, a Natural Guardian.
The proviso of Section 372 is an exception to the general law and same confers on a victim a right to appeal against acquittal, which is subject to the grant of leave by the Court. The first part of the definition of 'victim' as given under Section 2 (wa) (i.e. “Victim” means a person who has suffered any loss or injury caused by reason of the act or omission for which the accused person has been charged), is required to be construed in its literal sense and no liberal interpretation is required, Accordingly, only such person would be treated as ‘victim’, who is the subject-matter of trial being direct sufferer of crime in terms of loss or injury caused to his own body, mind, reputation and property and such loss or injury is one of the ingredient of the offence for which the accused person has been charged and, therefore, any other person cannot be accepted as victim within the first part of Section 2 (wa) for the purposes of maintaining appeal. The second part that is “includes his or her guardian and Legal Heir” would come into play when the actual sufferer is absent or suffers disability.
Thus, ictim means the actual sufferer of offence (receiver of harm caused by the alleged offence) and no person other than actual receiver of harm can be treated as victim of offence, so as to provide him /her right to prefer appeal under the proviso of section 372, though, in his or her absence or disability, his “legal heir” or “guardian” would qualify as victim and have a right to appeal. A person who claims himself to be 'guardian' or 'legal heir' of actual victim (direct sufferer), would be able to maintain appeal provided he establishes his claim as such before the court in his application by disclosing his particulars; relationship with the direct sufferer; and the grounds on which such claim of being “legal heir” or “guardian” is based.
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2016 (11) TMI 1735 - DELHI HIGH COURT
Determination of tax in certain special cases - tax on LTCG u/s 112(1) - Invocation of proviso to Section 112(1) in applying the lower tax @ 10% - foreign exchange benefits - AO turned down the assessee’s claim and imposed a higher rate of tax @ 20% - as submitted that in this case, the assessee did benefit from the foreign exchange fluctuations and was therefore barred from claiming benefit under Section 112(1) - ITAT applying the lower tax @ 10% - HELD THAT:- This Court notices that the assessee’s claim was examined by the ITAT which based its decision entirely on the judgement in CAIRN UK HOLDINGS LIMITED VERSUS DIRECTOR OF INCOME-TAX [2013 (10) TMI 430 - DELHI HIGH COURT] - This Court examined the interface between Section 48 and Section 112(1) of the Act and concluded the case in favour of the assessee that, like in the case of Cairn UK Holdings Ltd. that despite deriving foreign exchange benefits, the main benefit under Section 112(1) of the Act could not be denied. Since there is a previous ruling by this Court which we have disinclined to disagree with the impugned order, no question of law arises. The appeal is therefore dismissed.
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2016 (11) TMI 1734 - ITAT MUMBAI
TP Adjustment - research and development support services provided by the assessee to its associated enterprises - Comparable selection - HELD THAT:- Assessee provided assistance to its associated enterprises in conducting and co-ordinating testing, trials and experiments; interpretation of results of various such trials; assistance in literature search and any other services required by the associated enterprises with respect to the above. It is also emerging from record that in order to perform such functions, assessee is maintaining laboratory premises and employing necessary infrastructure suitable for such research and analytical testing., thus Companies functionally dissimilar with that of assessee need to be deselected.
Addition of interest on delay in realisation of dues from associated enterprises - HELD THAT:- As decided in assessee own case [2013 (1) TMI 60 - ITAT MUMBAI] we find that the assessee has no interest liability and it does not have any external borrowings. Even if the payments have been made by the A.E. beyond the normal credit period, there is no interest cost to the assessee. Moreover, there is no such agreement whereby interest is to be charged on such a delayed payment.
From the summary of payment submitted it is seen that the billing is done on quarterly basis and, accordingly, the payment is being received. Therefore, the delay is not wholly on account of late payment by the A.Es only. Moreover, the T.P. adjustment cannot be made on hypothetical and notional basis until and unless there is some material on record that there has been under charging of real income. Thus, on the facts and circumstances of the case, we are of the opinion that addition an account of notional interest relating to alleged delayed payment in collection of receivables from the A.Es, is uncalled for on the facts of the present case and is, accordingly, deleted.
Addition of foreign travel expenses - HELD THAT:- As entire disallowance is based on mere conjectures and surmises. In fact, what the DRP records that the details of expenses are “inadequate and not fully satisfactory”. In our considered opinion, the aforesaid inference of the DRP is not based on any factual support and, in fact, not even a single instance has been brought out which would show non-business purposes of the expenditure.
Quite clearly, even the adhoc disallowances are also required to be founded on certain specific discrepancies, an aspect which is conspicuous by its absence in the orders of authorities below for the year under consideration. Therefore, in our view, no disallowance can be upheld in this year on the basis of the order of Tribunal for Assessment Year 2009-10, which has been rendered in the background of specific findings of the lower authorities in that year. In the absence of any specific discrepancy/infirmity having been brought out by the lower authorities, the adhoc disallowance of 25% of foreign travel expenses is untenable - Decided in favour of assessee.
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