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Showing 41 to 60 of 1648 Records
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2017 (10) TMI 1612 - ITAT BANGALORE
Disallowance u/s. 14A - expenditure incurred on exempt income - HELD THAT:- We find that though the assessee has made investment in mutual funds, but during the impugned assessment years it has not received any dividend income on such investment according to the assessee. Therefore, in the absence of exempt income, no disallowance u/s. 14A can be made. It has been repeatedly held by the various High Courts and the Tribunal that where assessee did not earn any exempt income, no disallowance u/s. 14A can be made. In this case, the revenue has disputed the fact of receipt of exempt income, therefore, we find it appropriate to restore the matter to the file of the AO for verification of the fact. If the assessee does not have any exempt income, no disallowance u/s. 14A can be made, otherwise the AO may act in accordance with the law.
Validity of Order passed under section 143(3) r.w.s. 153A - HELD THAT:- We find that undisputedly assessment u/s. 143(3) was completed before the search took place upon the assessee. Nothing has been demonstrated before us that any incriminating material was found during the course of search which was used for completing the assessment u/s. 143(3) r.w.s. 153A - Therefore there is no incriminating material found during the course of search on the basis of which concluded assessment can be reopened and fresh assessment can be framed u/s. 143(3) r.w.s. 153A of the Act. The question that arises in this case is “whether the AO can reframe the assessment u/s. 153A on the basis of search conducted upon the assessee wherein no incriminating material is found?” This question was examined by this Bench of the Tribunal in which one of the Members was a party to it and the Tribunal having examined both the judgments of the Hon'ble jurisdictional High Court passed in the cases of Lancy Constructions [2016 (2) TMI 797 - KARNATAKA HIGH COURT] and Canara Housing Development Company [2014 (8) TMI 642 - KARNATAKA HIGH COURT] has concluded that in the absence of any incriminating material, proceedings u/s. 153A cannot be initiated and concluded assessment cannot be reopened
Thus as in the absence of incriminating material, the concluded assessment cannot be reopened and assessment u/s. 153A cannot be framed. In the instant case, undisputedly no incriminating material was found, therefore the assessment framed u/s. 143(3) r.w.s. 153A of the Act is not sustainable and we accordingly knock down the assessments. - Decided in favour of assessee.
Depreciation based on the disallowance of expenses as not eligible for depreciation - assessee has allocated capital work-in-progress [“CWIP”] to assets and accordingly had claimed depreciation on assets - HELD THAT:- CIT(Appeals) correctly re-examined the issue and directed the AO to consider certain amount as not eligible for forming part of CWIP which is to be utilized at the time of achieving the commercial operation of the assessee. AO was directed to consider the amounts as held not eligible for capitalization in deciding the appeal for AY 2007-08 & 2008-09 for the purpose of allowing depreciation.
TDS u/s 192 or 194J - Director sitting fees paid for attending audit committee meetings, board meetings, etc.- AO has disallowed this expenses on the ground that TDS has not been deducted on the said expenses - HELD THAT:- As we find that undisputedly amendment u/s. 194J was brought w.e.f. 1.7.2012, therefore it would apply from AY 2014-15, not in the impugned assessment year. Therefore, we find that the CIT(Appeals) has properly adjudicated the issue in the light of relevant provisions of the Act and we find no infirmity therein. We accordingly confirm his order.
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2017 (10) TMI 1611 - DELHI HIGH COURT
Jurisdiction - power of Metropolitan Magistrate (MM) - accused not arrested by investigating agency - authoritative determination - Whether a MM can examine the discretion exercised by the IO for arresting or non-arresting the accused persons, while considering the charge-sheet at the stage of taking of cognizance and if it is found that the IO has not exercised his discretion lawfully, whether the Court of MM can return the charge-sheet for further investigation on the point of arrest of accused persons?
HELD THAT:- The view taken by the learned Magistrate that in offences, whereof the sentence is beyond seven years, the investigating agency should necessarily arrest the accused and produce the accused in custody at the time of filing the charge-sheet under Section 173, Cr.P.C. before the Magistrate, has no basis and is contrary to the statutory scheme. In this regard, reference may be made to Sections 2(c), 41, 41(1)(b), 41(1)(b)(a), 157(1), 173(2)(e), 173(2)(f) & 173(2)(g) of the Code, which put the matter beyond any doubt that the investigating agency is not obliged to arrest the accused whenever a cognizable offence is registered. The discretion to arrest the accused has to be exercised by the investigating agency by applying the principles laid down in the Code itself.
The Metropolitan Magistrate cannot examine whether the discretion of the IO to arrest, or not to arrest the accused, has been properly exercised. He is only concerned with the chargesheet, as filed. He may return the charge-sheet if he finds that the investigation is not complete, or the charge is not borne out from the evidence collected and filed with the charge-sheet. But he cannot return the same merely because the accused has not been arrested and produced in custody at the time of filing the charge-sheet. The reference stands answered.
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2017 (10) TMI 1610 - CESTAT CHENNAI
Jurisdiction - SCN issued by DRI - Proper Officers to issue SCN or not - HELD THAT:- It may be mentioned that recently, the Hon'ble High Court of Delhi in the case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA & ORS [2017 (6) TMI 688 - DELHI HIGH COURT] has dealt with the identical issue where the notice was also issued by DRI.
The Hon'ble High Court of Delhi has considered the judgment in the case of M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT] which is stayed by the Hon'ble Supreme Court in UNION OF INDIA VERSUS MANGALI IMPEX LTD. [2016 (8) TMI 1181 - SC ORDER]. Finally the Hon'ble High Court has granted liberty to the petitioner by observing that "petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of MangLi Impex Ltd.”
The matter is remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon'ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard. Till the final decision, the status quo will be maintained - the appeals are allowed by way of remand.
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2017 (10) TMI 1609 - ITAT KOLKATA
TP Adjustment - valid reference made u/s 92CA(1) by the AO to the Transfer Pricing Officer (TPO) - HELD THAT:- From a perusal of the above records produced by the ld. DR, we find that the Assessing Officer has not made a reference as per law to the T.P.O. u/s 92CA(1) - AO of the assessee has to address a communication to the T.P.O. making the reference u/s 92CA(1) of the Act by mentioning as to which are the international transaction which require determination of ALP.
From the above, it is clear the revenue could not demonstrate that there was a valid reference u/s 92CA(1) of the Act, for both the impugned assessment years by the Assessing Officer to the T.P.O. Only letters of approval obtained for making the reference are available on record, right from the stage of assessment proceedings.
We agree with the contentions of assessee that the assessment orders passed for both the assessment years are barred by limitation as there is no valid reference by the Assessing Officer to the T.P.O and consequently the limitation specified u/s 153(1) of the Act, applies.
From a perusal of the above records produced by the ld. DR, we find that the Assessing Officer has not made a reference as per law to the T.P.O. u/s 92CA(1) of the Act. The Assessing Officer of the assessee has to address a communication to the T.P.O. making the reference u/s 92CA(1) of the Act by mentioning as to which are the international transaction which require determination of ALP.
It is clear the revenue could not demonstrate that there was a valid reference u/s 92CA(1) of the Act, for both the impugned assessment years by the Assessing Officer to the T.P.O. Only letters of approval obtained for making the reference are available on record, right from the stage of assessment proceedings.
We agree with the contentions of the ld. Counsel for the assessee, that the assessment orders passed for both the assessment years are barred by limitation as there is no valid reference by the Assessing Officer to the T.P.O and consequently the limitation specified u/s 153(1) of the Act, applies. Appeal of assessee allowed.
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2017 (10) TMI 1608 - CESTAT CHENNAI
Jurisdiction - power of DRI to issue SCN - section 28 of the Customs Act - HELD THAT:- By following the ratio laid down by the Hon’ble High Court of Delhi in the case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA & ORS [2017 (6) TMI 688 - DELHI HIGH COURT] as well as by considering totality of facts and circumstances, we set aside the impugned order and remand the matter to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of UNION OF INDIA VERSUS MANGALI IMPEX LTD. [2016 (8) TMI 1181 - SC ORDER] and then on merits of the case but by providing an opportunity to the assessee of being heard. Till the final decision, the status quo will be maintained.
Matter on remand.
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2017 (10) TMI 1607 - CESTAT CHENNAI
Jurisdiction - power of DRI to issue SCN - section 28 of the Customs Act - HELD THAT:- By following the ratio laid down by the Hon’ble High Court of Delhi in the case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA & ORS [2017 (6) TMI 688 - DELHI HIGH COURT] as well as by considering totality of facts and circumstances, we set aside the impugned order and remand the matter to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of UNION OF INDIA VERSUS MANGALI IMPEX LTD. [2016 (8) TMI 1181 - SC ORDER] and then on merits of the case but by providing an opportunity to the assessee of being heard. Till the final decision, the status quo will be maintained.
Matter on remand.
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2017 (10) TMI 1606 - BOMBAY HIGH COURT
Constitutional Validity of strike by the employees of the State Transport Corporation - seeking direction to employees of the State Transport Corporation to resume their duties forthwith - whether this Court in its writ jurisdiction under Article 226 of the Constitute of India is empowered to hold the strike of the employees of the Corporation was illegal when admittedly the issue is subjudice before the Court of the competent jurisdiction? - HELD THAT:- It is not in dispute that the Respondent-Union indeed undertakes public utility service which is so evident from the large network it has and the fact that it serves 7 million passengers daily on 13,700 routes across the State in 16,500 buses. Therefore, besides validity of the Notification issued by the State declaring Corporation renders public utility service, the facts of the case clearly discloses that because of the strike by the employees of the Corporation, life of people in the rural areas has heavily disturbed and virtually come to stand still. Judicial notice can be taken of the fact that private transport operators do not ply their buses on the every route and as such, there are no transport facilities available in the interior parts of the State except that of State Corporation. Judicial notice can also be taken of the fact that since last four days, the commuters, children, patients, handicapped persons, senior citizens are facing immense difficulties and as such, transport system in the rural parts of the State has collapsed to the considerable extent.
In this case, it was suggested to the union of Employees that the high-powered Committee will look into the grievance of the petitioner afresh and would also consider the interim hike in the pay within three weeks from the constitution of the Committee. It was suggested that the high-powered Committee would submit a report within two months - It was suggested to the Union that, in the given circumstances, it would be in the interest of all stakeholders and parties to participate in the negotiations with the high-powered Committee and arrive at an amicable solution. All these suggestions were not accepted by the Union. The Corporation is state within the meaning of Article 12 of the Constitution and thus, its employees stand on same footing as of that Government servants.
That since the services of the Corporation are in the nature of public utility and since the strike has caused immense inconvenience to the rural population and since the respondent, Union is not willing to have a resort to the machinery provided by the State i.e. constitution of high-powered Committee and also by taking into consideration the law laid down by the Supreme court in the case of T.K. Rangarajan [2003 (8) TMI 581 - SUPREME COURT], this Court is of the view that the strike by the employees of the State Transport Corporation of Maharashtra is, prima-facie, illegal - the strike by the employees of the State Transport Corporation is hereby declared illegal.
Application disposed off.
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2017 (10) TMI 1605 - ITAT AMRITSAR
Accrual of income - taxability of interest on NPA’s - Non declaration of interest income on non performing assets - HELD THAT:- As in the case of Jalandhar Central Co-operative Bank Ltd. [2017 (1) TMI 1255 - ITAT AMRITSAR] has dismissed the appeals filed by revenue and similarly in the case of Kapurthala Central Co-operative Bank Ltd., [2017 (7) TMI 1418 - ITAT AMRITSAR] has again dismissed the appeals filed by revenue on similar issue
The issue regarding taxability of interest on NPA’s is settled in favour of the assessee as being taxable in the year of receipt.
As decided in THE LUDHIANA CENTRAL LUDHIANA CO-OP. BANK LTD. [2017 (1) TMI 778 - ITAT CHANDIGARH] argument of the learned D.R. that the decision of the Delhi High Court in the case of Vasisth Chay Vyapar Ltd. [2010 (11) TMI 88 - DELHI HIGH COURT] would not apply to the assessee’s case since the assessee is a cooperative society while in the case of Vasisth Chay Vyapar Ltd. (supra), the assessee was a NBFC, is also dismissed since the pr inciple enunciated by the Delhi High Court in Vasisth Chay Vyapar Ltd. (supra) has been followed in the case of Shri Mahila Sewa Sahakari Bank Ltd. [2016 (8) TMI 377 - GUJARAT HIGH COURT] and various other decisions cited by the assessee before us ,and the assessee in all those cases being a cooperative bank, the decision rendered therein squarely applies to the case of the assessee.
Argument of the D.R. that the assessee is following the mercantile system of accounting is also dismissed since this aspect has been dealt with by 20 various High Courts referred to above wherein they have categorically held that even following the mercantile system of accounting the interest on NPA account cannot be said to have accrued in the impugned year since the recovery of the same was impossible and even otherwise for the purpose of Income Recognition the RBI Directions, 1998, had to be followed in view of section 45Q of the RBI Act.
We find no infirmity in the order of the CIT(A),holding the interest on NPA’s as taxable in the year of receipt , so as to warrant interference. - Decided against revenue.
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2017 (10) TMI 1604 - ITAT CHENNAI
Tonnage tax claim - assessee is engaged in shipping business and financing - Whether assessee is eligible for tonnage tax scheme as the assessee is only a fractional owner of the ship and thus satisfy the provisions of section 115VC(c)? - HELD THAT:- As relying on assessee own case [2013 (9) TMI 1287 - ITAT CHENNAI] since the ship was not operated by the assessee itself but by West Asia Maritime Limited, so it cannot be taken as entitled for the aforesaid benefit of tonnage tax. This argument in our view, does not merit acceptance. After going through the relevant provision, it nowhere comes out that in case of jointed owned ship by two or more companies, the same has to be operated specifically by each of the co-owners/assessees. Therefore, this ground also fails - Decided in favour of assessee.
Renewal of tonnage tax under section 115VR - submission of the assessee that the agreement entered into by the assessee on 25.09.2001 with co-owners to entrust the job to M/s. West Asia Maritime Ltd. to operate the ship still was in force and that the ship was on lease with M/s. Poompuhar Shipping Corporation to operate the same - As per assessee stress was on owning a “qualifying ship” and that it does not envisage to be a owner of fully owning a qualifying ship - HELD THAT:- By following the above order of the Tribuna lin the assessee’s own case for the assessment year 2005-06 [2011 (5) TMI 250 - ITAT, CHENNAI]. ld. CIT(A) directed the Assessing Officer to grant renewal of tonnage tax scheme as applied by the assessee. The above order of the Tribunal has not been reverted or reversed by any higher Court. Accordingly, we confirm the order passed by the ld. CIT(A), subject to the final verdict of the Hon’ble Madras High Court as has been contended by the ld. DR that the Department has filed further appeal against the order of the Tribunal. - Decided against revenue.
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2017 (10) TMI 1603 - ITAT CHENNAI
Income from house property - Annual value determination - Any distinction between a house property used for residential purposes or not ? - whether a house property owned by the assessee, held for being either sold, as in the case of residential flats at Victoria Towers, or for being let, as in the case of the shopping complex, is liable to be assessed as income from house property u/s. 22? - HELD THAT:- As apparent from the clear reading of the relevant provisions, and which again represent trite law, the actual letting of the house property is not a condition for income thereof to be assessable as income from house property u/s. 22. As afore-noted, it is the ownership of the house property per se which is the source of income, and not the fact whether the same is occupied by the assessee only or someone else – at a consideration (viz. a tenant) or otherwise. In that sense, it is the income potential of the house property that is subject to tax. The only exception, covered by the provision itself, is where the property is occupied by the owner for the purpose of his business or profession. Fiscal statutes, it is again trite law, have to be strictly construed.
What all is therefore relevant, and the only caveat, is that the annual value assessed should capture the fair rental value of the property, qua which we observe no dispute in the present case; the AO having adopted the same on the basis of reliable data. We, therefore, find no legal infirmity in the Revenue assessing the fair rental value of the, since completed, unsold residential flats at Victoria Towers to tax as income from house property u/s. 22.
In fact, sec. 23(5) stands inserted by Finance Act, 2017 (w.e.f. 01.04.2018), specifically providing that the annual value of a house property held as stock-in-trade of his business by the assessee shall be taken at nil for a period of one year from the end of the year in which a completion certificate is obtained in its respect. Further endorsing, if it was necessary, that the annual value of a house property held as stock-in-trade is equally assessable u/s. 22, i.e., irrespective of whether the same is actually let or not. The same, it needs to be appreciated, is not in occupation of the owner, much less for the purposes of his business, but represents the inventory of his trade, to be sold or even let.
Coming to the rental value, based on factual letting or otherwise, of the unsold shops at the shopping complex ‘Corromandel Plaza’. The Revenue has already assessed the rental (annual) income of these shops, being regularly let, as a part of the assessee’s business income u/s. 28. Where, then, we may ask, is the question of the Revenue, contradicting its’ own stand, seeking an assessment of the lettable value or the rent received as income from house property u/s. 22? Where it considers the AO’s stand as untenable in law, the only course available to it in law is the revision of his order u/s. 263. The claim for additional depreciation on plant and machinery and car park facility (so that it is not regarded by the assessee as part of the building) has not, as afore-noted, been adjudicated by the ld. CIT(A) per the impugned order, so that the matter shall have to necessarily travel to his file for adjudication after hearing the parties, i.e., in accordance with law, per a speaking order.
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2017 (10) TMI 1602 - SUPREME COURT
Constitutional Validity of Exception 2 to Section 375 of the Indian Penal Code, 1860 (the IPC) - Rape - whether sexual intercourse between a man and his wife being a girl between 15 and 18 years of age is rape? - HELD THAT:- Since this Court has not dealt with the wider issue of “marital rape”, Exception 2 to Section 375 IPC should be read down to bring it within the four corners of law and make it consistent with the Constitution of India.
It is opined that Exception 2 to Section 375 IPC in so far as it relates to a girl child below 18 years is liable to be struck down on the following grounds:–
(i) it is arbitrary, capricious, whimsical and violative of the rights of the girl child and not fair, just and reasonable and, therefore, violative of Article 14, 15 and 21 of the Constitution of India;
(ii) it is discriminatory and violative of Article 14 of the Constitution of India and;
(iii) it is inconsistent with the provisions of POCSO, which must prevail.
Therefore, Exception 2 to Section 375 IPC is read down as follows:
“Sexual intercourse or sexual acts by a man with his own wife, the wife not being 18 years, is not rape”.
It is, however, made clear that this judgment will have prospective effect.
It is also clarified that Section 198(6) of the Code will apply to cases of rape of “wives” below 18 years, and cognizance can be taken only in accordance with the provisions of Section 198(6) of the Code.
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2017 (10) TMI 1601 - ITAT DELHI
Rectification of application u/s 154 - AO has assumed jurisdiction u/s 154 for making the disallowance under section 14A of the Act to the book profits computed under section 115 JB - debatable issue - HELD THAT:- The question as to whether 14A disallowance can be made to the book profits or not is a debatable issue and it our considered opinion that the AO has got no jurisdiction to make such an addition while resorting to the provision of section 154 of the Act as the scope of said section is very limited.
As relying on various diversifies decisions it is concluded that the issue is quite debatable and under such circumstances, in our view, it was beyond the powers of the AO, exercisable under section 154 to make an addition on a debatable issue as the original assessment in this case had been completed under section 143(3) of the Act. Merely because another view is possible cannot be a ground to rectify the order under section 154 of the Act as the same cannot be said to be a mistake apparent on record. ITAT Mumbai Bench has also taken a similar view in the case of Beekaylon Synthetics Pvt. Ltd v. ACIT [2015 (7) TMI 1401 - ITAT MUMBAI] which we respectfully follow and hold that the AO had no power to make a disallowance u/s 14A of the Act to the book profits computed u/s 115JB by resorting to section 154 proceedings. We, accordingly, quash the order passed by the AO u/s 154. - Decided in favour of assessee.
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2017 (10) TMI 1600 - ITAT PATNA
Capital gain computation on transfer of leasehold rights of land - Value determined by the Stamp Valuation Authority - application of Section 50C in respect of leasehold rights in the land in question, which is owned by the Govt. i.e.Narela Industrial Complex, New Delhi - HELD THAT:- We find that this issue has already been examined by various Benches of the Tribunal wherein, it has been consistently held that the provisions of Section 50C of the Act cannot be invoked in transaction involving transfer of leasehold rights of land or building.
We do not find any justification in the orders of the authorities below in invoking the provisions of Section 50C of the Act and adopting the value of property as determined by the Stamp Valuation Authority for the purpose of computing the capital gain on transfer of assessee’s leasehold rights in the said plot.
We direct the AO to compute the capital gain on the transfer of leasehold rights of the aforesaid plot by adopting the value of the property at ₹ 55 lakhs as offered by the assessee. It is ordered accordingly, the ground raised by the assessee is allowed.
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2017 (10) TMI 1599 - ITAT DELHI
Disallowance u/s 14A r.w.r. 8D - Assessee’s contention that it held the shares as stock-in-trade and dividend income was only the bye-product of the trading activity and as such, there is no relation between the expenditure by way of interest and exempted income and that all the quoted shares have been shown as stock-in-trade and unquoted shares as investment because there is no ready market available for unquoted shares - HELD THAT:- Hon’ble High Court of Punjab & Haryana in judgment cited as Pr.CIT vs. State Bank of Patiala [2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] set this issue at rest by holding that when assessee has not held securities to earn dividend or interest but traded in them and dividend or interest accruing thereon was only a bye-product thereon or an incidental benefit arising thereof, the same would not be subjected to provisions of section 14A of the Act.
In case of Cheminvest Ltd. vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] also held that to attract section 14A, there should have been actual receipt of income which is not includible in total income and section 14A will not apply where no exempt income is received or receivable during the relevant previous year.
Both the judgments relied upon by the assessee are applicable to the facts and circumstances of the case and the issue is required to be decided afresh by the AO by keeping in mind that there is a distinction between stock-in-trade and investment. In case, motive behind sale and purchase of shares is to earn profit then the same cannot be treated as trading profit and when the object is to derive income by way of dividend then the profit would have been accrued from the investment as has been clarified by Circular No.18 dated 02.11.2015. Ground decided in favour of the assessee for statistical purposes.
Unsecured cash credit claimed as unsecured loan availed - CIT (A) admitted the additional evidence filed under Rule 46A - HELD THAT:- It is settled principle of law that the ld. CIT (A) has coterminus powers to conduct a discreet enquiry as to the genuineness and creditworthiness of the transactions. From the documents brought on record in the form of confirmation of account; copy of bank statement of M/s. Udgam Commercial (P) Ltd. (lender); copy of bank statement of the appellant company reflecting the transactions; copy of income tax return filed by the lender for the AY 2009-10; copy of Memorandum and Articles of Association of the lender; and copy of the audited financials of the lender for the year ended 31st March 2009, the ld. CIT (A) made himself satisfied that the assessee has duly established the creditworthiness of the creditors and genuineness of the transaction.
When the assessee has brought on record all the documents necessary to establish the creditworthiness of the creditors and genuineness of the transaction and the AO has not preferred to file any comment, we find no scope to interfere into the findings returned by ld. CIT (A). Moreover, perusal of the assessment order also goes to prove that the AO has not even preferred to summon the parties to make complete enquiry so as to establish the creditworthiness of the creditors and genuineness of the transactions. - Decided in favour of assessee.
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2017 (10) TMI 1598 - ITAT BANGALORE
Reopening of assessment u/s 147 - Mandation of considering objections against reopening - whether the matter is required to be reconsidered at the level of the AO for deciding the objections by a speaking separate order or the assessment order is liable to be quashed for want of a separate order of Assessing Officer deciding the objections prior to the passing of the assessment / reassessment order? - HELD THAT:- Assessee filed the objection against the Notice under Section 148 only on 28.3.2013 and the Assessing Officer was left with no option but to finalise the assessment before the expiry of limitation for completing the assessment on 31.3.2013. Assessing Officer has completed the assessment vide order dt.28.3.2013 whereby the objections of the assessee were also disposed off. Accordingly, we find that decisions relied upon by the ld. DR on this point are applicable in the facts of the present case and therefrom, we set aside the impugned order of the CIT (Appeals) as well as the assessment order and remit the matter to the record of the Assessing Officer for deciding the objections of the assessee by a separate speaking order and in case the objections of the assessee are rejected then after allowing the assessee a period of four weeks the Assessing Officer may pass the assessment order.
Assessee has raised the objection against the reassessment on the ground that when the provisions of Section 153C are applicable in the case of the assessee then the Assessing Officer cannot resort to the provisions of Sections 147 and 148 - These objections of the assessee were not considered and decided by the CIT (Appeals) therefore, when the objections of the assessee are directed to be considered and decided by the Assessing Officer by a separate speaking order as the issue raised in the revenue’s appeal, the objections raised by the assessee in the C.O. are also therefore set aside to the record of the Assessing Officer for considering and deciding the same along with the other objections.
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2017 (10) TMI 1597 - ITAT PUNE
Claim of depreciation and related expenses on the vehicles registered in the name of the Director of assessee company - ownership of asset/vehicle - disallowing the depreciation claimed for the cars used by the directors for officials work of the company but ownership documents in the name of individual director - HELD THAT:- It is an undisputed fact that the vehicles on which the depreciation has been disallowed and interest on loan taken on such vehicles are reflected in the audited Balance-sheet of the assessee and the repayment of the loan is also made by the assessee. The only reason for disallowance of depreciation was that the vehicles are not in the name of assessee but are in the name of the Director of assessee’s company. The submission of the assessee that the vehicles have been used for the purpose of business of the assessee has not been controverted by Revenue. We find that in the case of CIT Vs. Dilip Singh Sardarsingh Bagga [1992 (9) TMI 74 - BOMBAY HIGH COURT] had held that an assessee who has purchased the motor vehicle for valuable consideration and used the same for his business cannot be denied the benefit of depreciation on the ground that the transfer was not recorded under the Motor Vehicles Act or that the vehicle to be in the name of the vendors.
As decided in SWATI AUTO LINK P. LTD VERSUS INCOME TAX OFFICER [2013 (2) TMI 727 - ITAT AHMEDABAD]mere non-registration of a vehicle in the name of company under the Motor Vehicles Act cannot disentitle an assessee to its claim of depreciation, when the investment for purpose of vehicle had made and it being used for the purpose of business is an undisputed fact. It further noted that the requirement of Section 32 of the Act is that the vehicle must be owned by the assessee and not that the assessee must be a “registered owner” under the same Motor Vehicles Act.
We further find that Hon’ble Calcutta High Court in the case of CIT Vs. Salkia Transport Associates [1982 (9) TMI 28 - CALCUTTA HIGH COURT] as observed that the requirement of Sec.32 of the I.T. Act is that the vehicles must be “owned by the assessee”. This section does not require that the assessee must be a registered owner of the vehicles in order to claim depreciation allowance in respect of him - Decided in favour of assessee.
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2017 (10) TMI 1596 - ITAT DELHI
Penalty u/s 271(1)(b) - non-compliance in attending hearing - ignorance to notice issued for hearing - assessment orders in the present cases have been passed by the AO u/s. 153A read with section 143(3) - HELD THAT:- In the instant case the notice issued for hearing on 20.12.2012 stood complied with, as the AR of the assessee attended the proceedings on this date and submitted reply/details which he had in possession. DR also could not refute the contention of the assessee that all the information/details stood filed with the department before receipt of show cause notice of penalty on 31.01.2013.
In the cases of assessee the AO appears to have levied the penalty for seven assessment years , i.e., from 2005-06 to 2011-12 and the ld. CIT(A) deleted the penalty for the 4 assessment years i.e. the assessment years 2008-09 to 2011-12, considering the explanation of the assessee as plausible. However, the same explanation was not considered as proper for the remaining assessment years i.e. assessment years 2005-06 to 2007-08. In our opinion, the stand taken by the ld. CIT(A) was not justified particularly when he was satisfied that there was a proper and plausible explanation for the 4 out of the 7 assessment years for which penalty was levied by the AO u/s 271(l)(b) of the Act.
No cogent reason to observe any willful default on the part of the assessee or non-cooperative attitude with the department. Therefore, we find no justification to sustain the penalty imposed u/s. 271(1)(c) of the Act. Accordingly, the appeal of the assessee deserves to be allowed.
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2017 (10) TMI 1595 - ITAT MUMBAI
Income from other sources or capital receipt - interest income - interest received on Fixed Deposits from the capital work-in-progress and being interest received against margin money - Allowance of relatable interest expenditure incurred on interest income u/s. 57(iii) - Assessee before us filed complete details of interest received and interest paid including the banks from which loans have been taken by the assessee and the FDRs made by it - HELD THAT:- We find that this issue has been considered by Hon’ble Supreme Court in the case of CIT vs. Karnal Co-operative Sugar Mills Ltd [1999 (4) TMI 7 - SC ORDER] as clearly laid down the principal that the deposit of money which are directly linked with the purchase of plant and machinery, any income earned on such deposit which was incidental to the acquisition of asset for the setting up of plant and machinery, the consequential interest was capital receipt which would go to reduce the cost of asset.
Similar view was taken by the Supreme Court in the case of Bongaigaon Refinery & Petrochemicals Ltd [2001 (7) TMI 4 - SUPREME COURT]
Respectfully following the judgment of Hon’ble Supreme Court, we also direct the Assessing Officer to find out from the details whether this interest earned was out of the borrowed funds, which was directly linked to the purchase of plant and machinery, in that eventuality, the Assessing Officer will treat the interest as capital receipt. In case the interest is relatable to surplus funds, out of share capital and reserve & surplus, interest will be treated as ‘Income from other sources’. As regards to deductibility of interest expenditure, in case the AO treat this interest receipt as income from other sources, the same shall be considered by Ld. AO as per law. We direct the Assessing Officer accordingly.
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2017 (10) TMI 1594 - ITAT DELHI
Addition u/s 14A r.w.r. 8D - assessee was unable to differentiate that investment so made was not from the common pool funds - CIT-A restricted the addition - HELD THAT:- The assessee produced balance sheet showing the dividend earned and interest paid and also the computation income of the assessee which clearly establishes that the assessee earned a dividend income of ₹ 4,83,547/- and paid a total interest of ₹ 17,48,43,433/- for term loan whereas in the computation of income the assessee themselves disallowed a sum of ₹ 56,55,890/- towards expenses relating to the exempt income - the assessee themselves allowed ₹ 56,55,890/- whereas Ld.CIT(A) restricted the addition of ₹ 3,89,51,174/- to ₹ 23,79,288/-.
It is pertinent to note that the assessee did not express any grievance by challenging the finding of the Ld.CIT(A) in continuing the addition but to a limited extent. In our considered opinion, the finding of the Ld.CIT(A) cannot be challenged by the Revenue keeping in view the settled position of law on this aspect and also in view of the fact that the assessee accepted the same without challenging it by way of appeal or cross-objection. We, therefore, upheld the finding of the Ld.CIT(A) and dismiss this ground of appeal.
Addition in respect of ESOP alleging the outgoing expenses are only notional and the expenditure is allowable only when the shares are purchased by the employer - HELD THAT:- Issue decided in favour of assessee as relying on Lemon Tree Hotels Ltd [2016 (2) TMI 788 - ITAT DELHI].
Capital gain - assessee relinquishes his rights in respect of a commercial space - difference of fair market value and the value adopted by the assessee for relinquishment of right in commercial property - AO referred the matter to the Department Valuation Officer and accepted the valuation of DVO and added the difference to the income of the assessee - CIT-A deleted the addition an found the value at which the rights were relinquished is more than the valuation as per the circle rates prescribed by the Stamp Valuation Authority inasmuch as value as per the relinquish mandate deed - HELD THAT:- On a careful consideration of this matter and in the light of the provisions of section 50C(1) to (3) of the Act and the decisions relied upon by the assessee, we are of the considered opinion that the findings reached by the Ld.CIT(A) do not suffer any irregularity and the reasons given by the Ld.CIT(A) to reach such findings are impeccable. With this view of the matter, we are not inclined to interfere with the findings of the Ld. CIT(A) and consequently dismiss this ground of the appeal.
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2017 (10) TMI 1593 - PUNJAB & HARYANA HIGH COURT
Dishonor of Cheque - non-service of notice - principles of natural justice - HELD THAT:- Perusal of the record reveals that non-appearance of the petitioner before learned trial Court is justified for the reason that he was not served at the given address. Moreover, after passing of the impugned order dated 05.09.2016 by learned trial Court, the petitioner has been granted anticipatory bail by learned Additional Sessions Judge, Ambala vide order dated 02.01.2017. Therefore, in these circumstances particularly when the matter has been compromised between the parties and the respondent No.2- complainant has withdrawn the complaint under Section 138 of the NIA Act, continuation of criminal proceedings against the petitioner under Section 174- A IPC would amount to abuse of process of law.
Petition allowed.
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