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2019 (8) TMI 1864 - ITAT KOLKATA
TP Adjustment - Appellant benchmarked the transactions by applying TNMM on entity level - lower authorities adopting aggregation approach and benchmarking all international transactions at entity level as opposed to transaction by transaction approach - HELD THAT:- We are of the considered view that the arm's length price is essentially required to be determined on transaction-by-transaction approach for each international transaction separately. For that purpose, a transaction in singular also includes plural for closely linked transactions.
Where the transactions are not closely linked, that their ALP should be determined separately for each international transaction and such determination of ALP for 'an' international transaction as per section 92C(1) is done as per the most appropriate method.
Each international transaction is to be viewed separately and independent of other international transactions for determining its ALP by using one of the given methods, which is the most appropriate method having regard to the nature of transaction or class of transaction or functions performed, etc. It is impermissible to combine all the international transactions for determining their ALP in a unified manner when such transactions are diverse in nature.
Thus it is the higher of actual income or the arm's length income from an international transaction, which is taken into consideration for computing the total income.
We find that the international transactions inter alia including purchase of raw materials and export of printing inks manufactured out of it, the appellant has sufficiently demonstrated that these transactions are closely linked and inter-related and therefore may be considered together for benchmarking purposes. Both these transactions relate to the appellant’s manufacturing activity and have similar FAR analysis.TNMM is therefore held to be the most appropriate method, as claimed by the appellant as well as the Revenue, for benchmarking these set of transactions. In respect of the press chemicals purchased from AEs for trading, we note that this set of transactions have no relation or connection with purchase of raw materials and export of printing inks and are hence separate & distinct.
We find that the press chemicals purchased relate to pure trading functions of the appellant wherein minimal assets are employed and risks assumed are also significantly less in comparison to the other set of transactions viz., purchase of raw materials and export of manufactured printing inks.
We find merit in the submissions of the Ld. AR of the appellant the TPO’s act of aggregating these three set of international transactions and benchmarking it on entity level was not the correct approach. Instead, in light of the provisions of Section 92 and Rules framed there under and also the judicial precedents available on this issue, we hold that the transaction-by-transaction approach was the most scientific and correct way to determine the ALP of each of set of similar / closely related international transactions.
Whether therefore the use of segmented information qua the (a) manufacturing segment and (b) trading segment is permissible in the given facts of the present case? - We uphold the use of segmented information for benchmarking the trading activity involving purchase of finished goods and manufacturing activity involving purchase of raw materials and export of manufactured goods. We further note that the segmented information furnished by the appellant before the lower authorities were audited results and complete details of allocation keys were also set out therein. In these circumstances, the segment results cannot be said to be unreliable - on perusal of the transfer pricing order, we agree with the ld. DR that these segmented results were never verified by the TPO since he had out-rightly rejected the same. we uphold the Ld. DR’s alternative claim and set aside the audited segmented results to the file of the AO for the limited purpose of verification and crosscheck with the overall audited financial statements of the appellant. Needless to say, the appellant shall be afforded sufficient opportunity of being heard, in this regard.
Application of the internal RPM, as employed by the appellant, for benchmarking the purchase of press chemicals - We uphold the application of internal RPM for benchmarking the international transactions involving purchase of press chemicals from AEs. We accordingly direct the TPO/AO to consider the assessee’s audited trading segment results and to compute arm`s length price by applying internal RPM.
Application of internal TNMM qua the manufacturing segment, for benchmarking the international transactions involving purchase of raw materials and export of manufactured printing inks and the appellant’s claim for resegmentation of the manufacturing segment into further sub-segments viz., (i) manufacture of printing inks and (ii) manufacture of blankets -We find merit in the ld. DR’s argument that the alleged sub-segment viz., manufacture of blankets is very small does not have any material bearing on the overall manufacturing segment. Accordingly we reject both these claims of the appellant and hold that external TNMM was the most appropriate method.
Comparability analysis undertaken by the lower authorities under the TNMM - We agree with the ld. AR’s contention that a good comparable can be said to be a company which is engaged in the same line of business and not any down-stream or up-stream company, which forms part of the supply chain. In the present case the appellant manufactures printing inks and not pigments. Instead it procures pigments from pigment manufacturers or suppliers, thus one of the mentioned six comparables retained by the DRP are good comparables and hence stands rejected/ excluded.
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2019 (8) TMI 1863 - ITAT AHMEDABAD
Addition of LTCG u/s 50C - value adopted or assessed or assessable by the stamp valuation authority - AO has adopted the value as per stamp valuation authority as on 06.04.2011 on the ground that sale value determined by the stamp valuation authority was higher than the sale consideration referred in the sale agreement - Whether proviso to sub section (1) of Sec. 50C is not with retrospective effect of it came into effect from 01.04.2017 only? - HELD THAT:- It is clear that in the case of the assessee the Banakhat (Agreement to Sale) was made on 20.11.2010 which was duly notarised on 20.03.2011 and sale consideration was determined at Rs. 76,00,000/- and entire payment has been received by account payee cheque by 31.03.2011 and sale consideration as on date of execution of agreement to sale was higher than the transfer valuation.
It is clear from the aforesaid material fact that assessee has received the entire amount of sale consideration by account payee cheque before 31.03.2011 and there was delay of five days in the registration of the document due to shortage of stamp etc.
Considering decision of DCIT vs. S. Venkat Reddy [2016 (10) TMI 844 - ITAT HYDERABAD] as referred in the findings of the Ld. CIT(A) and the decision in the case of Dharamshibhai Sonani [2016 (9) TMI 1259 - ITAT AHMEDABAD] the appeal of the Revenue is dismissed.
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2019 (8) TMI 1862 - ITAT PUNE
TP Adjustment - non-granting of working capital adjustment - HELD THAT:- As relying on Emptoris Technologies India (P.) Ltd [2015 (10) TMI 738 - ITAT PUNE] DRP/TPO/AO should be directed to grant working capital adjustments in the hands of the comparable to bring the same to the level of the assessee and the same is required while benchmarking the international transactions entered into by the assessee. The finding of the CIT(A) is not correct when he stated that the figures are based on presumptions - Decided in favour of assessee.
Manner of quantification of adjustments - restricting to the value of international transactions only and not to the all transactions at the entity level - HELD THAT:- As decided in M/s. Hyundai Construction Equipment India Pvt. Ltd case [2019 (4) TMI 1286 - ITAT PUNE] as relying on the Jurisdictional High Court judgement in the case of CIT vs. Firestone International (P.) Ltd [2015 (6) TMI 1123 - BOMBAY HIGH COURT] asserted that the TP adjustments are to computed not considering the entity level sales. Rather it should be done ideally considering the relatable sales drawing the quantitative relationship to the imports from the AEs, i.e. controlled cost. The principle of relevant here proportionality is and it is a settled law in this regard. In the situation like the one in the instant case of the assessee, there is data relating to controlled and uncontrolled cost particulars. This undisputed data is suffice to arrive the proportionate sales relatable to the international transaction with the AEs ie controlled cost. Also we direct the AO to restrict the adjustments, if any only to the international transaction with AE - Decided against revenue.
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2019 (8) TMI 1861 - BOMBAY HIGH COURT
Maintainability of appeal - who is the victim - whether the appellant Mahendrasinh Jorubha Zala, who is merely examined as a witness during the course of the trial, cannot be considered as the victim of the crime in question, and as such, cannot validly maintain the appeal under Section 372 of the Cr.P.C.?
HELD THAT:- Undisputedly, the appeal is a creature of statute and the said right inheres in no one. Right of appeal cannot be assumed to exist unless expressly provided for by the statute and a remedy of appeal must be legitimately traceable to the statutory provisions. If the express words employed in a provision do not provide for an appeal from a particular judgment and order, the court is bound to follow the express words of the statute. For its maintainability, the appeal must have the clear authority of law. Section 372 of the Cr.P.C., in terms, makes it clear that no appeal can lie from any judgment and order of a criminal court, except provided for by the Cr.P.C. or by any other law for the time being in force. Proviso clause of Section 372 of the Cr.P.C. empowers the victim to prefer an appeal. Thus, an appeal under the Criminal Procedure Code is also a creature of statute and cannot be assumed until and unless clearly provided under the Cr.P.C. Therefore, in view of the aforesaid statement of law no appeal under the Criminal procedure Code can be filed except as provided in the said Code. The said right of appeal cannot be 'read into' any class of citizen/party to a trial if not expressly contemplated under the Cr.P.C.
From a bare perusal of the text of Section 372 of the Cr.P.C., it is clear that legislature in its wisdom has given a right of appeal only as provided in the Cr.P.C. and has expressly forbidden any appeal which is not contemplated under the Cr.P.C. Further perusal of Sections 372 and 378 of the Cr.P.C. manifest the nature of order. The party who is competent to file an appeal against the said order is also clearly and unambiguously stipulated in the Cr.P.C.
It is, thus, clear that victim is 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. Thus, whether a person is a victim or not, is required to be judged qua the Charge framed against the accused persons in the concerned trial, in the light of averments made in the charge-sheet filed by the prosecuting agency. The Charge framed by the trial court against the accused must be in respect of that act of the accused, by which the victim has actually suffered any loss or injury. Therefore, it becomes relevant to reproduce the Charge framed against the accused persons in the said sessions cases.
An appeal by a witness, who cannot be termed as a victim as defined by Section 2(wa) of the Cr.P.C., against an order of acquittal would be a fortiori and ex-facie barred under section 372 of the Code.
An appeal against an order of acquittal by the appellant, who is not the victim, is not at all maintainable under the provisions of the Cr.P.C. and the same is liable to be dismissed at the very threshold, it being a circuitous attempt to impugn the Judgment of acquittal without any authority of law - Appeal dismissed.
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2019 (8) TMI 1860 - BOMBAY HIGH COURT
Disallowance u/s.14A on a reasonable basis - HELD THAT:- Tribunal noted the fact that Rule 8D of the Rules would not be applicable prior to the Assessment Year 200809, as held by this Court in Godrej & Boyce Manufacturing Company Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] In the above view, the Tribunal upheld the reasonable basis for disallowance of expenditure to earn exempted income at 5% of the investment as held by the Commissioner of Income Tax (Appeals). Thus, dismissed the Revenue’s appeal for the Assessment Year 2004-05.
We note that the decision of the Tribunal is in accord with the view of this Court, as approved by the Hon'ble Supreme Court. Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained.
Allowing the netting off the prior period income against the prior period expenditure without ascertaining the nexus between income and expenditure - HELD THAT:- Tribunal held that the Respondent was justified in computing the disallowance after setting off prior period income against the prior period expenses. In fact, the Tribunal noted the fact that for the Assessment Year 2007-08, the Revenue had accepted the net income offered after set off of prior period income with prior period expenses. This is in that year, where expenses of prior period were less than prior period income.
We find that the view taken by the Tribunal on the facts cannot be found fault with. This, particularly, as the Revenue for a subsequent period accepted this practice of set off, which resulted in income and subjected it to tax. The basis/ principles for allowing the set off of prior period income with prior period expenses, has to be consistent for years. Therefore, the view taken by the Tribunal cannot be found faulted with.
No substantial question of law.
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2019 (8) TMI 1859 - SUPREME COURT
Appointment in the post of Civil Judge - Seeking direction to declare her result and appoint her as a Civil Judge, provided she has secured more marks than the last selected candidate in the Most Backward Class category - Respondent contended before the High Court that she did not violate any of the conditions stipulated by the Commission - relief granted on humanitarian ground - HELD THAT:- The Instructions issued by the Commission are mandatory, having the force of law and they have to be strictly complied with. Strict adherence to the terms and conditions of the Instructions is of paramount importance. The High Court in exercise of powers under Article 226 of the Constitution cannot modify/relax the Instructions issued by the Commission as held in M. Vennila v. Tamil Nadu Public Service Commission [2006 (6) TMI 538 - MADRAS HIGH COURT].
The High Court after summoning and perusing the answer sheet of the Respondent was convinced that there was infraction of the Instructions. However, the High Court granted the relief to the Respondent on a sympathetic consideration on humanitarian ground - The judgments cited by the learned Senior Counsel for the Respondent in TAHERAKHATOON (D) BY LRS. VERSUS SALAMBIN MOHAMMAD [1999 (2) TMI 679 - SUPREME COURT] and CHANDRA SINGH VERSUS STATE OF RAJASTHAN [2003 (7) TMI 692 - SUPREME COURT] in support of her arguments that we should not entertain this appeal in the absence of any substantial questions of law are not applicable to the facts of this case.
In spite of the finding that there was no adherence to the Instructions, the High Court granted the relief, ignoring the mandatory nature of the Instructions. It cannot be said that such exercise of discretion should be affirmed by us, especially when such direction is in the teeth of the Instructions which are binding on the candidates taking the examinations.
After giving a thoughtful consideration, we are afraid that we cannot approve the judgment of the High Court as any order in favour of the candidate who has violated the mandatory Instructions would be laying down bad law. The other submission made by respondent that an order can be passed by us under Article 142 of the Constitution which shall not be treated as a precedent also does not appeal to us.
Appeal allowed.
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2019 (8) TMI 1858 - ITAT DELHI
Transfer of case u/s 127 - Transfer of existing jurisdiction from Central Circle-16 (now Central Circle-20) to the ITO WardI. 21(1), New Delhi,specially when the PCIT of Central Circle-16 and ITO Ward-21(1) are different - HELD THAT:- Hon’ble Delhi High Court in the case of Abhishek Jain vs. ITO [2018 (6) TMI 211 - DELHI HIGH COURT] Clearly held that Section 127 relates to a transfer of case from one Assessing Officer to another Assessing Officer who otherwise is not having jurisdiction as per direction of the Board u/s.120 and 124 of the Act - The aforesaid clarification by the Hon’ble Jurisdictional High Court clearly clinches the issue that if the case is being transferred from one Assessing Officer having jurisdiction over the assessee to another assessing officer who otherwise was not having the jurisdiction in terms of direction of the Board u/s.120 and 124 of the Act, then transfer order u/s 127 is mandatory, without which the jurisdiction of the Assessing Officer cannot be conferred to pass any order. If such a statutory procedure is not followed then there would be a chaos where any Assessing Officer can pass order in the case of any assessee even when he does not have any territorial jurisdiction over that assessee. Thus, we are of the opinion that an order u/s. 127 is mandatory which has to be passed by the competent authority if jurisdiction is transferred from one Assessing Officer to another Assessing Officer who otherwise does not have the jurisdiction over the assessee.
In this case, the Ld. CIT-DR had brought on record that there is some kind of transfer order which has been passed on 19.02.2016 vide ‘transfer order no. 200000047799’ wherein the PAN of the assessee has been transferred from Central Circle-20 to Ward-21(1) Delhi. If such an order has been passed, then can it be reckoned that it is an order passed u/s.127, is not very clear? Before us, no specific transfer order has been passed except for transfer order number and the transfer date from the website. Even till the conclusion of the hearing, no specific order was produced before us. Under these circumstances and in order to ascertain the correct facts, we are of the opinion that on this specific issue the matter is remanded back to the Assessing Officer, who shall examine whether any transfer order has been passed u/s.127 or not. If vide such transfer order number and transfer date the case of the assessee has been transferred u/s 127, then assessee’s contention stands rejected.
Addition u/s.56(2)(viia) read with Rule 11UA - main contentions raised by the ld. counsel that the deeming provision of section 56(2)(viia) would not apply on the facts of the present case as a transaction was between the same family/group companies and therefore, it cannot be deemed that it was case of money laundering of unaccounted money or colorable transaction - HELD THAT:- The purposive construction can only be resorted when there is any ambiguity in the section or there is contradiction in two provisions of the same statute, in that case then, legislative intent can be looked into. Here, no such ambiguity or contradiction is there in the provision nor has been pointed out before us. The argument of the Ld. Counsel to see the rationale while enacting the provision and examine reasonableness cannot be accepted, because, a Court of law has nothing to do with the reasonable or unreasonableness of a provision of a statute except that it may hold what the Legislature has stated. If the language of the statute has assigned only one meaning then it must be taken to be meant and intended to that only what has been clearly expressed. Ergo, when section 56(2)(viib) has clearly provided that, if a person receives after 1st day of June 2010 any property being shares of a company and if the consideration is less than aggregate Fair Market Value of the property, then the amount exceeding such Fair Market Value has to be brought within the taxing net. Thus, even if some hardship may have been caused by invoking this provision, it cannot be held that the deeming provision will not apply. Accordingly, the contention raised by the ld. counsel is rejected.
Contention of the ld. counsel that the aggregate value of all the 26 companies should be taken for the purpose of construe the aggregate Fair Market Value of the property to include all the 26 companies - We are unable to subscribe to such a view or the meaning of “aggregate” propagated before us. Section clearly states that “any property, being shares of a company”. The word ‘aggregate fair market value’ refers to the said property only, i.e., the share of a company.There is no such exception or provision where a transaction relating to purchase of shares of several companies are undertaken then the fair market value of shares of all the companies needs to be aggregated or any kind of set-off of positive and negative figure is to be given, i.e., where the FMV of a share is negative or FMV is lesser than the purchase value, then same is to be adjusted with transaction of shares of a company where FMV is positive. In case where purchase consideration is more than FMV, then clause (viia) is not be attracted, because the statute has clearly provided that this section would be invoked only when difference between the purchase consideration of Fair Market Value of a share of a company is more than Rs.50,000/-. Thus, provisions would be applicable share-wise qua the same company. Besides this, reasoning given by the Ld. CIT (A) on this point as discussed above is reasonable and plausible to which we also agree. Accordingly, such a contention raised by the ld. counsel is rejected.
Contention that Rule 11UA is not workable for the reason that the said Rule provides that the audited balance sheets as on the valuation date should be prepared by the auditor appointed u/s.224 of the Companies Act, 1956, whereas, w.e.f. 01.04.2013 Companies Act, 2013 has been enacted for appointment of the auditors in Section 139; at the face of it cannot be entertained - Even if corresponding amendment brought in the Companies Act, 2013 has not been brought in Rule 11U, that does not mean that Rule 11U has become redundant or nonoperative. As highlighted by the ld. Assessing Officer, there is no difference in wordings of earlier Section 224 and new Section 139 and in fact they are pari materia. In such a case the provision of the former enactment has to be construed in the same manner as re-enacted. Accordingly, the finding of the ld. Assessing Officer and Ld. CIT (A) in this regard is confirmed.
Calculation errors in the valuation done by the AO as per the Rule 11UA - Since calculation error in the figures taken by the AO for the valuation has been pointed out as per the detail working submitted before, therefore, we find it fit that same needs to be verified by the AO. Accordingly, we direct the Assessing Officer to examine the calculation as submitted by the AO and correct the figures if any after verification and rectify the error and grant consequential relief.
AO and Ld. CIT(A) have erred in law and on facts in not giving any deduction of various adjustment made by the auditors in the value of assets in his report/financial statements on the date of transfer, i.e., 30th March, 2018 - Here in this case, as culled out from the record and also as pointed out by the ld. counsel before us that the balance sheet for all the companies was drawn on the valuation date, wherein the auditor of the company have drawn the balance sheet of each companies on the valuation date which included notes annexed and forming part of the accounts and in such notes, the auditors have qualified the value of assets by making various adjustments which does not represent the real value of the asset. The notes along with the balance sheets have also been incorporated by the Assessing Officer in his order.
Determination of FMV of unquoted shares under sub Rule 2 of Rule 11UA, the balance sheet of the company includes notes annexed thereto forming part of the accounts as drawn on the valuation date which has been audited by the auditor of the company. One of the key reasons for not allowing any adjustment in the assets and liabilities by the Assessing Officer and the Ld. CIT (A) are that the balance sheet figures of relevant items for which assessee has claimed adjustment as on 30th March, 2015 and 31st March, 2015 are the same, that is no adjustment has been made in the value of assets in the final figure of assets and liabilities. It has been clarified by the ld. counsel that though for the purpose of accounting standard and disclosure requirement under the Companies Act, the figures of assets have been given in the balance sheet which may be similar to as on 30th March, 2015 and 31st March, 2015, however on the valuation date the balance sheet prepared contains detail notes to the accounts wherein auditors have clearly clarified and qualified certain items which does not represent the value of the assets.
In the case of the real estate/construction companies, certain items like construction and development expenses, finance cost, advances made to the suppliers, contractors, unamortized amount of deferred expenditure, preliminary expenses and certain other items which due to method of accounting under accounting standard or under the Income Tax Act are capitalized but eventually are deferred for a period of time which either becomes part of the P&L account or are written off.
The fair market value of the shares has to be seen qua the real value of the underlying asset. In our opinion, if there are any items which has been capitalized in the value of the asset for a time being or there is any amortized cost loaded on the asset or with any charges etc., at the year-end, then same cannot represent the real value of the asset on the date of transfer. Even the Rule recognises that the balance sheet drawn on the valuation date by the auditor includes notes to the accounts annexed thereto has to be taken for the purpose of determining the fair market value under Rule 11UA (2); and the book value of the assets has to be reduced by the amount which does not represent the value of the asset. If the auditor has qualified and has clearly stated that certain amount does not represent the value of the asset, then such notes has to be read in the balance sheet as per the mandate of Rule 11UA. Thus, we hold that principally the book value of the asset can be reduced by an amount which does not represent the value of the asset while determining the fair market value of the shares under Rule 11UA(2).
During the course of the proceedings assessee has given the communication/letters whereby the NOIDA authority have stated that the amount deposited has been forfeited and based on such event auditors have reduced the amount from the value of the asset, then it cannot be held that as on the date of valuation, it represents the true value of the asset even though assessee still recognized as a part of an asset in the balance sheet hoping for some future recovery or does not want to give up its claim. Thus, when the factum of money forfeited is not in dispute, in our opinion then such forfeited amount of earnest money/advances given to the Government Authorities reflected as asset in the books cannot be treated as amount representing the value of asset. Thus, same is directed to be reduced from the value of the asset and accordingly, the contention raised by the assessee is allowed.
Borrowing cost / interest cost incurred for purchase/development of flats and projects - CIT (A) has rejected the said contention on the ground that the provision of Rule 11UA talks about the Fair Market Value of the asset and not property or immovable assets and the FMV of the share is determined taking into consideration book value of the asset and the book value of the liabilities - HELD THAT:- We are of the opinion that any borrowed or interest cost capitalized to the value of the asset cannot represent the real value of any asset for the purpose of determining the book value so as to determine the Fair Market Value of shares.
Claim of bad debts - Even if the company has not written off the bad debt, but auditors have found that it is not recoverable for many years and have reduced from the value of asset, then same cannot be held to represent the value of the asset on the date of valuation, Simply because the amount has not been written off as on 31st March, 2015, it does not mean it is to treated as part of value of asset. Accordingly, AO is directed to reduce the said amount from the value of the asset while valuing the book value of asset.
Coming to the electrical material, tiles, marbles and hardware damaged but forming part of asset - We agree with the contention of the ld. counsel that such payment for EDC and fee etc. relating to such portion of land which has been compulsorily left for public at large but is not related to any open area, roads, parks, hospital by the resident colony, etc. then such charges does form part of the asset for the project and does not represent the value of the asset. Assessing Officer is however directed to verify the contention of the ld. counsel and only reduce the payment for EDC charges and fee etc. paid to the Government Authorities pertaining to land compulsorily earmarked for used of public at large and any other business investment or stock-in-trade shown should not be reduced.
Ld. counsel had also claimed deduction for investment in land for green Valley Realtors Pvt. Ltd and impairment in the value of investment in project due to continued business recession, but we are the opinion that same cannot be allowed as deduction, because they are part and partial of the value of the asset; and moreover nowhere it has been pointed out how the impairment in the value of the asset in the project due to continued business recession has been quantified. It is purely hypothetical which cannot be allowed.
Other claims which has been rejected by the Assessing Officer and Ld. CIT (A) have not been pressed before us like impairment in value of property due to adverse court’s order and statutory liabilities, therefore, same are not considered and otherwise also the finding of the Ld. CIT (A) and Assessing Officer in this regard are based on certain factual facts which is confirmed. Accordingly same is rejected.
Thus, in view of our aforesaid finding, Assessing Officer is directed to value the Fair Market Value of the shares based on the principle that the book value of the asset in the balance sheet has to be reduced by the amount which does not represent the value of any asset, and thereafter, determine the fair market value of shares and determine the income taxable u/s.56(2)(viia).Appeal of the assessee is partly allowed.
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2019 (8) TMI 1857 - MADRAS HIGH COURT
Seeking for a Writ of Mandamus to direct the respondents herein to extend the darshan time of the holy deity Adhi Athi Varadhar beyond 17.08.2019 (i.e. beyond 48 days) - existence of any universal or Agahama Rule that the deity would be taken out from the sacred pool once in 40 years and would be available only for 48 days for worship? - HELD THAT:- Though the petitioners have contended that there are no Agama rules that the darshan can be only for 48 days, it is seen from the inscription the period has been specified which represents one mandalam and as per the letter dated 07.08.2019 of the temple Archagas and Sthanikars, extracted supra, as per the agama rules, darshan should be only for 48 days, i.e. one mandalam and there should not be any change. If there is a change, it would be against the agama rules. Immersion should be done after 48 days of darshan. Thennachariya Dharishana Sabha has also given their opinion vide their letter dated 31.07.2019, that the Idol of “Sri Athi Varadhar” should be immersed after the completion of 48 days as on 17.08.2019 as per the custom and usages which are prevalent from time immemorial. Thus, the respondents have contended that darshan of Sri Athi Varadhar is for only 48 days and immersion is as per custom and usages. Contention of the petitioner that there is no agama rule as regards period of darshan is disputed.
It is trite law that disputed questions of fact cannot be adjudged in writ proceedings.
The aspects as to whether there are agama, rules or note as to when the deity should be taken out from the pool and how many days it should be kept for dharshan can be adjudicated only before a Competent Civil Court, and not in this writ petition.
A prerogative writ, like, a Mandamus cannot be demanded ex debito justiatiae, but it can be issued by the court in its discretion, for which, it must be shown that, there is a non discretionary legal duty upon the authority against whom, the relief is sought for and that the person approaching the High Court under Article 226 of the Constitution of India, has to prove that he has a legal right to be enforced against the authority, for the failure of performance of a legal or statutory duty, by the authority against whom, the relief is sought for.
Petition dismissed.
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2019 (8) TMI 1856 - BOMBAY HIGH COURT
Income taxable in India - data processing fees paid by the India branch of the Assessee bank to the Singapore branch - HELD THAT:- We are informed that from the order of the Co-ordinate bench of the Tribunal for Assessment Year 2006-07, Revenue filed an appeal to this Court [2018 (3) TMI 1991 - BOMBAY HIGH COURT] raising this very issue.
This Court’s order did not entertain this question as proposed therein on the grounds that the same in the facts of the case was academic in nature. This for the reason what was being paid by the Indian entity to its Singapore branch was only in the nature of reimbursement of expenses. This finding of fact was not challenged in the Revenue’s appeal for Assessment Year 2006-07 or in these appeals for Assessment Year 2008-09 and 2009-10. The Revenue has not been able to show any difference in facts and/or in law in the subject Assessment Years to that in Assessment Year 2006- 07. Therefore, the above decision of this Court for Assessment Year 2006-07 will apply in these two Appeals.
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2019 (8) TMI 1855 - SC ORDER
Cancellation of registration certification of selling dealer - HELD THAT:- Issue notice.
There shall be a stay of the impugned order passed by the High Court.
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2019 (8) TMI 1854 - ITAT CHANDIGARH
Unexplained cash deposits in the bank account - receipt of cash on sale of Popular tree - assessee explained that he alongwith his family members has 27.5 Acres of agriculture land and there were “ Popular Trees” on 20 Acres of land and that the trees were also planted on the periphery of the field which were sold for Rs. 20.65 lacs during April and May 2009 - HELD THAT:- In the present case, the A.O. while observing that trees were already cut in the earlier years had not brought any evidence on record to rebut this contention of the assessee that the Popular trees were already planted on the periphery of the field.
Therefore, by considering the totality of the facts, particularly the acceptance given by the purchasers of the Popular trees in their respective affidavits, sale proceeds from Shri Ziledar Ali and Shri Mohan Walia apart from the agriculture income estimated by the Ld. CIT(A) at Rs. 11,00,000/- was sufficient to make the deposit of Rs. 26,68,850/- in the bank account of the assessee. In that view of the matter the addition sustained by the Ld. CIT(A) is deleted. Appeal of the assessee is allowed.
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2019 (8) TMI 1853 - ITAT MUMBAI
TP adjustment - Payment for Global Information System (‘GIS’) Services - adjustment pertaining to GIS services, Payment for Multinational Client Co-ordination (‘MNC’) service, Payment for Management Service Fee (‘MSF’) services - HELD THAT:- We find that both the parties before us agreed that the issue in dispute is already addressed by this tribunal in assessee’s own case for the Asst Year 2010-11 [2019 (8) TMI 922 - ITAT MUMBAI] wherein it was held that duty of the ld. TPO is restricted only to the determination of the arm‟s length price of an international transaction between two related parties by applying any of the methods prescribed u/s.92C of the Act read with rule 10B of the rules. Thus, there is no provision made in the statute empowering ld. TPO for determining the ALP on a particular international transaction on an estimation basis / adhoc basis no hesitation in directing the ld. TPO to delete adjustment made to ALP in respect of aforesaid three services viz., GIS services, MSF Services and MNC Services.
Addition of non-reconciliation on certain amounts reflected in Form 26AS with the return of income of the assessee - HELD THAT:- We find that the assessee had specifically mentioned before the ld DRP that the total of gross billings as per assessee’s records are more than the gross amounts reflected in the AIR report and also explained the reasons for the difference in a broad manner. We further find that the assessee had reconciled the differences in respect of all parties except to the tune of Rs 7 lacs (approx.) out of the total turnover of Rs 200 crores (approx.). We find that this issue was also addressed by the order of this tribunal in assessee’s own case for the Asst Year 2010-11 [2019 (8) TMI 922 - ITAT MUMBAI] held assessee was engaged as an Advocate to argue the matters by what is popularly known as Advocates on record or instructing Advocates method, meaning thereby the client does not engage the assessee directly but a professional or the Advocate engaged by the client requests the assessee to argue the case. The brief is then taken as the counsel brief. That being the practice, the assessee gave an explanation that the breakup as desired cannot be given and with regard to all payments. It is pointed out that at times, assessee receives fees directly from the clients or from the instructing Advocates or Chartered Accountants if such professionals have collected the amounts from the clients.
The breakup as desired cannot be placed on record. An explanation which has been given by the assessee and accepted in the past has been now accepted by the Tribunal once again. Since it is accepted for the Assessment Year 200607, in the peculiar facts, in relation to the present assessee, we are of the view that this Appeal does not deserve to be entertained. - Decided in favour of assessee.
Short grant of credit for tax deducted at source - We direct the ld AO to verify the same and decide the issue accordingly
Chargeability of interest u/s.234D is consequential in nature. We also direct the ld. AO to verify whether at all any refund was actually granted to the assessee or adjusted with tax arrears with due intimation to the assessee before deciding the levy of interest u/s.234D of the Act.
Adjustment towards assistance in brand building - HELD THAT:- As from documents clearly go to prove that the assessee’s receipt of assistance in brand building from Lowe Singapore is towards the services provided to its client HUL in the form of (i) disbursal of shortfall in assessee’s service fees identified as a part of reconciliation exercise for the Asia Pacific region and (ii) share of assessee in the incentive paid by the Unilever group at global / regional level.
In addition to this service fees, we find that the assessee had also earned incentive from HUL at local level as well as from Unilever group at global / regional level which is disbursed by Lowe Singapore based on analysis of quantitative and qualitative parameters being achieved.
We find that the payment from Lowe Singapore to assessee is only disbursal of assessee’s share in incentive provided by Unilever group to the Lowe group. Accordingly, the ld TPO’s contention that assessee should earn same level of incentive from Lowe Singapore by applying the CUP method is completely erroneous.
Selection of comparables by the ld TPO - We find that the observations of ld DRP is factually incorrect and is not germane to the facts available on record. It is a fact that the assessee had not selected any comparables with regard to this issue in its TP study report. Hence the entire observations made by the ld DRP in this regard is factually incorrect and deserves to be dismissed.
We also find that the transaction of ‘assistance in brand building’ was always there is earlier years and also in subsequent years. TPO had accepted the same to be at ALP in earlier and subsequent years. More importantly, the very same transaction was not subject matter of any adjustment in Asst Year 2013-14 which is also in appeal before us along with this appeal. There is absolutely no finding given by the ld DRP on this aspect of principle of consistency.
We are inclined to accept the various arguments advanced by the ld AR and accordingly direct the ld TPO / ld AO to delete the adjustment made towards ‘Assistance in Brand Building’ - Accordingly, the Grounds 12 to 15 raised by the assessee for the Asst Year 2012-13 are allowed.
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2019 (8) TMI 1852 - TELANGANA HIGH COURT
Seeking grant of interim relief - denial of such interim relief has resulted in serious inconvenience and hardship to the airlines in general and public at large - HELD THAT:- There is no dispute that the appellant-writ petitioner is a licensee of respondent No.1 and the duration of the license came to an end on 22.03.2019. There is no renewal/extension of license in favour of the appellant-writ petitioner. There is also no dispute with regard to arbitration clause in the license agreement. The transaction entered into in between the parties is purely a commercial one and no element of public interest is involved. There is no obligation on the part of respondent No.1 to extend the period of license from time to time, as per the terms agreed in between them. Since the license of the appellant-writ petitioner expired long back on 22.03.2019 and a notice dated 27.06.2019 was issued by the respondent No.1 to the appellant-writ petitioner to vacate the premises by 30.06.2019, there is no prima facie case and balance of convenience in favour of the appellant-writ petitioner and no irreparable loss would be caused to the appellant-writ petitioner.
Appeal dismissed.
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2019 (8) TMI 1851 - ITAT DELHI
Addition u/s 68 - acceptance of share application money - HELD THAT:- Major source of funds of the investor company is reserves and surplus which itself are on account of share premium. The examination of profit & loss account of the investor company reveals that turnover of the assessee was only Rs.8,81,675/- and net profit was only Rs.95,000/-.
As observe from the balance sheet of the investor company that most of the funds are locked up in, investment and loans and advances. The funds locked up in investment are Rs.89 lakhs whereas funds locked up in loans and advances are to the extent of Rs.2,56,45,000/-. Turnover of the assessee company is quite low as compared to the funds of the company which clearly demonstrates that the investor company is indulging into sham transactions. The investor company has invested in the share capital of the assessee company at a premium of Rs.90 per share. The share application money for a share of Rs.10 has been received by the assessee @ Rs.100 per share.
The examination of the audited accounts of the investee company demonstrates that assessee had not carried out any significant activities. The examination of balance sheet of investee company reveals that the funds of the company are in the form of reserves and surplus and share application money and application of funds is in loans and advances. The financials of the investee company does not warrant that it deserves share premium of Rs.90 per share, therefore, all these facts prove that the transactions of share application money is not a genuine transaction.
As decided in NRA IRON & STEEL PVT. LTD. [2019 (3) TMI 323 - SUPREME COURT] assessee is under legal obligation to prove the receipt of share capital/premium to the satisfaction of the Assessing Officer, failure of which, would justify addition of the said amount to the income of the assessee. In the present case, though the assessee has received an amount through banking channel but the analysis of the financial statements of investor company do not warrant any justification for having invested in the investee company at a huge premium of Rs.90 per share, specifically keeping in view the fact that investee company is also not engaged in significant activities. Therefore, in view of the facts and circumstances, the appeal of the assessee is dismissed.
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2019 (8) TMI 1850 - SUPREME COURT
Interpretation of law - harmonizing - the words “by another year” - issue related to deemed confirmation of the services of the first respondent who was a probationer in the school of the appellants. - HELD THAT:- It emerges from the consistent line of precedent of this Court that where the relevant rule or the appointment letter stipulates a condition precedent to the confirmation of service, there is no deemed confirmation of service merely because the services of a probationer are continued beyond the period of probation. It is only upon the issuance of an order of confirmation that the probationer is granted substantive appointment in that post. Rule 105(2) stipulates the satisfaction of the appointing authority as a condition precedent to the issuance of an order of confirmation.
The first respondent was continued as a probationer for nearly five years in contravention of Rule 105 of the 1973 Rules as well as the appointment letter dated 18 June 2008. There was no order of confirmation. Though the first respondent cannot claim a deemed confirmation of service without the issuance of an order of confirmation, the power of this Court to do complete justice under Article 142 of the Constitution must be invoked in an appropriate manner. While there can be no deemed confirmation in the favour of the first respondent, the relief can be suitably moulded by an award of ex-gratia compensation. A teacher who has spent five valuable years of her life and may now be overaged to get suitable employment elsewhere must not be left in the lurch. A management which has defied the law must be put to terms, which we propose to do under Article 142.
(i) The words “by another year” in Rule 105(1) of the 1973 Rules stipulate that the maximum period of probation permissible is two years. The limit equally applies to minority institutions covered by the first proviso to Rule 105; and
(ii) Rule 105(2) stipulates a condition precedent to the issuance of an order of confirmation. The continuation of the services of a probationer beyond the period of probation does not amount to a deemed confirmation of service. It is only upon the issuance of an order of confirmation by the appointing authority that a probationer is confirmed in service.
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2019 (8) TMI 1849 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Initiation of CIRP - Objection / Appeal by another lender (Financial Creditor) against the initiation of CIRP - Locus Standi - NCLT admitted the application in the second round - earlier NCLT had rejected the application - Corporate Debtor as 'Gwalior Bypass Project Limited' - Appellant allege that the applicant, ICICI Bank has loan to corpoate debtor in the absence of approval of NHAI, as mandated in terms of the Concession Agreement dated 9th October, 2006. - according to the Counsel for the Appellant sanction of loan by ICICI Bank having not been approved by NHAI, the Bank by filing application under Section 7 cannot deprive the Appellant from occupying position of sole/ senior lender
HELD THAT:- A limited notice is required to be given to the 'Corporate Debtor' before admitting an application under Section 7. In such case, the 'Corporate Debtor' may raise objection and may point out that there is no debt payable in law or in fact or that the default has not been committed. It is also open to the 'Corporate Debtor' to take plea that the Applicant is not a 'Financial Creditor' or 'Operational Creditor'. The 'Corporate Debtor' may also settle the claim with the 'Financial Creditor' or 'Operational Creditor' before admission of an application under Section 7 or 9.
The Appellant being not a Member/ Shareholder of the 'Corporate Debtor', and has claimed to be a 'Financial Creditor' of the 'Corporate Debtor' has no right to intervene to oppose admission of the application under Section 7 preferred by the ICICI Bank against the 'Corporate Debtor'.
After admission of the application under Section 7, if the Appellant claims that it is one of the 'Financial Creditor', it can file claim before the 'Resolution Professional', but it cannot challenge the order of admission in absence of any challenge by the 'Corporate Debtor', on the ground that it has first charge on the asset of the 'Corporate Debtor' or has superior claim over the claim of the other 'Financial Creditors'.
Appeal dismissed.
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2019 (8) TMI 1848 - ITAT JAIPUR
Maintanabiity of appeal - low tax effect - HELD THAT:- We note that the tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from Rs. 20,00,000/- to Rs. 50,00,000/-. The appeal of the department is not maintainable being monetary limit is less than/not exceeding Rs. 50,00,000/-.
Department is at liberty to file the Miscellaneous Application in case the tax effect in this appeal is found to be more then Rs. 50,00,000/- or the case falls in any of the exceptions of the circular. In the result, both the appeals of the department are dismissed.
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2019 (8) TMI 1847 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA
Seeking Liquidation of corporate Debtor - Section 33 of I & B Code, 2016 - HELD THAT:- This is a fit case wherein an order for liquidation is to be passed. The Coc has failed in approving any resolution plans with in the period of CIRP. In the said circumstances, it is unfair and unjust to continue the proceedings in the case in hand. On the other hand, the RP being failed in submitting a resolution plan under Section 30(6) of the I & B Code, 2016, an order for liquidation is liable to be passed under Section 33 of I & B Code, 2016.
The Liquidator is empowered to sell the Corporate Debtor company under liquidation as a going concern. The Liquidator can explore all the possibility as to whether the Corporate Debtor can be sold as a going concern failing which, he is also empowered to take steps under Section 230 of the Companies Act, 2013. That being the powers given to the Liquidator, we do not find any justifiable reason to exclude the period of the litigation pending up to the Hon’ble Supreme Court and wait further till the disposal of the appeal pending before the PMLA.
Corporate Debtor is ordered to be liquidated - application allowed.
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2019 (8) TMI 1846 - ITAT MUMBAI
Estimation of income - bogus purchases - HELD THAT:- Dispute remains only with regard to the source from which the assessee purchased the goods. The addition of the entire purchase is not justified. Therefore, to that extent, Commissioner (Appeals) was correct in estimating the profit on the non-genuine purchases for the purpose of addition.
Reasonableness of estimating profit @ 12.5%, after over all consideration of facts and material on record, the nature of business carried on by the assessee as well as the gross profit margin earned, we are of the view that estimation of profit @ 6% of the non-genuine purchases would be reasonable. Accordingly, we direct the Assessing Officer to restrict the addition in both the assessment years under appeal to 6% of the non-genuine purchases. Grounds raised by the Revenue are dismissed and grounds raised by the assessee are partly allowed.
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2019 (8) TMI 1845 - CESTAT AHMEDABAD
Non-payment of service tax on account of payment of Customs duty - non-levy of service tax on the portion of service of Erection, Installation and Commissioning - eligibility for CENVAT Credit - suppression of facts or not - invocation of time limitation - revenue neutrality - HELD THAT:- There are force in the argument of the Ld. Counsel that they had paid the service tax at the relevant time they were entitled for the cenvat credit and since they are paying huge amount of excise duty from PLA there was no gain to the appellant by not paying the service tax, therefore, malafide intention cannot be attributed to the appellant.
In the identical situation this Tribunal has considered the limitation aspect in the case of MESSERS JOHN ENERGY LIMITED VERSUS C.C.E. & S.T. -AHMEDABAD-III [2018 (11) TMI 1389 - CESTAT AHMEDABAD] wherein the Tribunal has held that this is a clear case of Revenue neutrality. Accordingly, the nonpayment of Service Tax cannot be said to be with malafide intention. The issue of Revenue neutrality has been considered in various judgments cited by the appellant in particular Larger Bench judgment in the case of JAY YUHSHIN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI], according to which if there is a case of Revenue Neutrality the longer period cannot be invoked.
There are no suppression of fact or malfide intention for non payment of service tax, therefore, the demand is not sustainable on limitation itself - since, we have deciding the matter on limitation we are not going into the merit of the case.
Appeal allowed.
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