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Showing 61 to 80 of 1903 Records
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2019 (8) TMI 1844 - CESTAT ALLAHABAD
CENVAT Credit - waste - duty paid on the common Cenvatable inputs used in the manufacture of excisable goods as also in the manufacture of said dross/skimming - failure to maintain separate records - non-excisable goods have to be treated as exempted goods or not - requirement to pay a particular percentage of the value of the zinc scrap - HELD THAT:- The issue stands decided by the earlier decision of the Tribunal. Particular reference can be made to the Tribunal decision in the case of M/S. APL APOLLO TUBES LTD. (UNIT-II) VERSUS COMMISSIONER OF GST & CENTRAL EXCISE [2019 (7) TMI 733 - CESTAT CHENNAI] vide which an identical situation was considered by the Tribunal and the dispute was resolved in favour of the assessee, where it was held that As per settled decisions, the goods which are not consciously manufactured by the appellants and which emerged in the process of manufacture cannot be considered as goods manufactured by the appellants. Thus, when the zinc scrap which is a waste arising out of process of manufacture of finished goods, is not goods manufactured by the appellant, the same cannot be considered as exempted goods manufactured by them.
The impugned order is set aside - appeal allowed - decided in favor of appellant.
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2019 (8) TMI 1843 - ITAT AHMEDABAD
Revision u/s 263 - Taxability on estimated income from the development and construction project of building - Estimation of net profit by invoking provisions of Section 145 - Revenue recognition - addition made by the AO by applying percentage completion method delete by CIT - HELD THAT:- AO could not challenge the project completion method adopted by the assessee to the percentage completion method unless all significant risks and rewards of ownership have been transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership. The assessee has referred to BU permission etc. and has demonstrated on facts that the risks associated with the project continued with the developer in a significant way during the year under consideration.
It is also not in dispute that the income has been ultimately offered in the later assessment year and duly assessed. Thus, the entire exercise of the AO is revenue neutral. The CIT(A) in our view correctly appreciated the facts and circumstances of the case and has taken note of the revenue recognition in the later year. We are unable to see any infirmity in the process of reasoning adopted by the CIT(A) while granting relief to the assesse. The assessee has also demonstrated that the revenue recognized from project has been actually assessed and accepted in 143(3) r.w.s. 263 of the Act proceedings. We thus see no merit in the appeal of the Revenue.
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2019 (8) TMI 1842 - SUPREME COURT
Nature of expenditure - technical knowhow expenditure - revenue or capital expenditure - only objection of the AO was that by virtue of the amendment in Section 32, this position would no longer be valid - Income accrued in India - attempt to tax the income in the hands of the assessee in relation to the assessee's units situated at USA and UK - HELD THAT:- The special leave petition is dismissed. Pending application stands disposed of.
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2019 (8) TMI 1841 - KARNATAKA HIGH COURT
Seeking a declaration where the proceeding pending before the Company Law Tribunal are void and non est - seeking a direction to restore the control and superintendence of the Company to the shareholders of the Company, as it stood prior to 29.10.2018 - whether the proceeding initiated by respondent Nos.1 to 3 under the Code are non est and ab initio void? - HELD THAT:- It is well settled in law that when an issue involves a pure question of law, a party need not be relegated to alternative remedy - It is evident that it applies to all the lenders, however, Clause (D) of the Circular which prescribes timelines for large accounts to be referred under the IBC and contains Clauses 8 to 13 are reproduced below for the facility of reference.
It is evident that all actions under the Circular dated 12.02.2018 including the actions in which insolvency has been triggered has been struck down by the Circular. It has further been held that consequently, all the cases in which the debtors have been proceeded against the financial creditors under Section 7 of the Code only because of the operation of the impugned Circular, which, being faulted at the very inception are declared to be non est - In the instant case, it may be noticed that Section 7 of the Code confers a statutory right for initiation of Corporate Resolution Process on a financial creditor.
The submissions made on behalf of the petitioners that the proceeding initiated by respondents before the Tribunal under the Code are non est and void ab initio cannot be accepted. It is also pertinent to mention here that since the Circular dated 12.02;2018 has already been quashed by the Supreme Court in its entirety, therefore, the contention that whether or not it applies to the case of the petitioners need not be gone into - the petition disposed off.
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2019 (8) TMI 1840 - ITAT AHMEDABAD
Rectification of mistake - Period of limitation - Revenue contended that in the case of Mehul Lavjibhai Mehta [2018 (8) TMI 278 - GUJARAT HIGH COURT] that the Department should submit appropriate rectification application before the ITAT and further contended that since similar issues/ground involved in this case therefore we should allow application of the Department - HELD THAT:- We have seen record and heard both the parties since no directions have been given by the Hon’ble High Court in the case of assessee therefore same are not applicable in the case of assessee.
Section 254(2) says- “The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed], with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer.”
Since Miscellaneous Application has been filed on behalf of the Department beyond the period of six months from the end of the month in which order was passed. Therefore, miscellaneous application is time barred and cannot be entertained. Moreover no directions have been given by the Hon’ble High Court in this matter. However, we do not want to go into the merit of the case as already we have held that miscellaneous application is time barred. Miscellaneous Application filed on behalf of the Revenue is dismissed
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2019 (8) TMI 1839 - ITAT BANGALORE
TP Adjustment - Under utilization of capacity - assessee contends that the TPO erred in not appreciating the fact that the losses incurred by the assessee in the manufacturing segment was mainly due to under utilization of capacity and that both the TPO and DRP had erred in computing the capacity utilized by the assessee - only difference between the contentions of the assessee and the TPO was on whether the mean average of capacity utilization should be adopted or whether the capacity utilization of only Motors should be adopted - HELD THAT:- We find merit in the contentions put forth by the learned AR of the assessee that the capacity utilization of only the main product, i.e., the Motors, should be considered. The other two components, namely, coils and parts, in our considered opinion, are only incidental components and cannot by any stretch of imagination be equated and treated on par with the main product, i.e., Motors.
The installed capacity of Motors, Coils and Parts are 38,000, 80,000 and 3,82,000 respectively, whereas the price of these are Rs. 18,426/- per motor, Rs. 312/0 per coil and Rs. 172/- per part. In these factual circumstances, as narrated above, assigning of equal weight age to motors, coils and parts and taking the mean average for computing the capacity utilization will clearly result in distortion of the real picture on this issue. We hold and direct the TPO that the weighted mean of the capacity utilization should be adopted for computing the adjustment for under utilization of capacity, as was taken by the assessee.
Comparable selection - Exclusion of NGEF (Hubli) Ltd. - In the case on hand, however, it is not ascertainable as to whether this company, 'NGEF' has satisfied all the filters applied by the TPO. In this factual matrix of the case, we concur with the plea of the learned DR for Revenue that the comparability of this company, 'NGEF', needs to be tested on the touchstone of satisfying all the filters that have been applied for ascertaining the comparability of all other companies - We remand the issue of comparability of 'NGEF' back to the file of the TPO for fresh consideration. Needless to add, the TPO shall accord the assessee adequate opportunity to put forth its contentions/submissions in the matter, which shall be duly considered before deciding the issue of comparability of 'NGEF'. We hold and direct accordingly. Consequently, ground of assessee's appeal is treated as allowed for statistical purposes.
Disallowance of Software Expenses - Nature of expenses - HELD THAT:- As in the assessee's own case for Assessment Year 2009-10, [2015 (11) TMI 1719 - ITAT BANGALORE] we hold that these software expenses incurred towards payments towards licence fees for usage of leased licences and application are revenue in nature and are to be allowed as deduction. While giving effect to this order, the AO is also directed to withdraw the depreciation allowed by him to the assessee on this issue in impugned order of assessment. We and direct the AO accordingly Consequently, grounds of assessee's appeal are allowed.
Deduction u/s 10A - DRP directing the AO to recomputed the deduction allowable u/s. 10A when there is no provision stipulated in the section that the expenses required to be reduced from the export turnover as per clause (iv) of the explanation to section 10A to be reduced from the total turnover also - HELD THAT:- As respectfully following the decision in the case of CIT Vs. HCL Technologies L td. [2018 (5) TMI 357 - SUPREME COURT] we direct the AO to allow assessee's claim for deduction u/s 10A of the Act. Consequently, the grounds raised by revenue are dismissed.
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2019 (8) TMI 1838 - CESTAT KOLKATA
CENVAT Credit - input services or not - services rendered by the commission agents/stockists - credit denied on the ground that the services rendered by Consignment Stockist is not related to ‘sales promotion’ as required in the said Credit Rules - Suppression of facts or not - time limitation - HELD THAT:- It is found that apart from effecting mere sale of goods, the concerned agents are also mandated to undertake sales promotion related activities. It is specifically stated in the agreement that the Consignment Stockist will foster and promote sale, inform the appellant about demand prospects, distribution and sale of appellant’s goods, arranging warehouse facility etc. It is clear that the responsibility assigned to the said Stockist is not restricted only to sale of product but also to undertake sales promotion activities.
The issue relating to eligibility of credit on commission agent services is no longer res-integra inasmuch as this Tribunal in Essar Steel India Ltd. [2016 (4) TMI 232 - CESTAT AHMEDABAD], as also relied by the appellant, has held that the above amendment would be applicable retrospectively and would cover cases for the past period also. The co-ordinate Bench of this Tribunal at Ahmedabad held that In the present case, the expressions in the explanation as inserted by Notification No. 2/2016-C.E. (supra), make it clear that it is for explaining the meaning of clause “sales promotion” in the context of Rule 2(l) of the Rules, 2004. It is to provide an additional support to the dominant object of the word “sales promotion” in Rule 2(l) in order to make it meaningful and purposeful. The language of the explanation is consistent with Board Circular to the benefit of the assessee and it would be effective retrospectively.
Time Limitation - malafide intent or not - HELD THAT:- It is not in dispute that the availment of credit was duly disclosed in ER-1 returns. The observations made by the Ld. Commissioner that the nature of credit availed was not disclosed by appellant in the return is not correct for the reason that in the absence of any column in the return requiring the assessee to disclose the nature of input service, the same cannot be construed to mean that there is a malafide intention on the part of the appellant - in absence of suppression on the part of the appellant, the impugned SCN dated 04.11.2016 issued by invoking extended period of limitation is not sustainable.
The appeal filed by the assessee succeeds both on merits as well as on limitation.
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2019 (8) TMI 1837 - ITAT MUMBAI
Unexplained jewellery - addition of 270 Gms. of Gold - source of acquisition of ornaments - Jewellery found in possession of the family members is in accordance with customs and practice prevalent in the community - Scope of CBDT Circular No. 19 of 2016 - assessee submits that the assessee claimed that out of total gold jewellery of 371 gram belongs to a married female member - HELD THAT:- The impugned jewellery of 270 gms is much less than 500 gms as per CBDT Circular No. 19 of 2016, in our view, the ratio of SATYA NARAIN PATNI [2014 (5) TMI 1002 - RAJASTHAN HIGH COURT] clearly covers the issue in favour of assessee. Therefore, we direct the Assessing Officer to allow the relief to the assessee in directing to delete the addition on account of unexplained investment. - Decided in favour of assessee.
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2019 (8) TMI 1836 - SC ORDER
Admissibility of petition - Arbitral Award - financial creditor - it was submitted that an Arbitral Award cannot be treated as a ‘financial debt’ - initiation of CIRP against two sets of Corporate Debtor for the same set of claim - HELD THAT:- The appeal is dismissed.
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2019 (8) TMI 1835 - ITAT PUNE
Addition on account of bank interest on deposits belonging to the society - HELD THAT:- Contention of the assessee that the “interest income” accrued on the deposits of the society is not taxable in the hands of the assessee, stands rejected by the Tribunal over the years. Considering the above written submission on this issue on hand and the order of the Tribunal in assessee’s own case for the assessment year 2010-11 [2017 (12) TMI 1398 - ITAT PUNE] on the identical issue, we are of the opinion, the issue raised by the assessee in ground no.1 should be dismissed. Accordingly, the ground no.1 raised by the assessee is dismissed.
Disallowance of business expenditure shown as ‘Exceptional Items’ - HELD THAT:- As it is evident that the expenditure in connection with an abandoned project is an allowable expenditure. It is not the case of the Revenue, that assessee spent on capital assets like the land, building etc. The capital nature of the expenditure in question i.e. IPO expenses is not relevant when it comes to a case of abandoned project like the present one. Therefore, we are of the opinion, the ground no.2 raised by the assessee should be allowed.
Deemed dividend addition u/s 2(22)(e) - Correctness of invoking the provisions of section 2(22)(e) - HELD THAT:- As the entire accumulated reserves of (i) M/s Riverview Properties Pvt. Ltd. and (ii) M/s Khiranagar Development Pvt. Ltd. are nothing but the share premium. The same is outside the scope of the “accumulated reserves” within the meaning of section 2(22)(e) of the Act. Thus, in the absence of eligible reserves and surplus with the payer companies, the provisions of section 2(22)(e) of the Act are not correctly invoked by the Assessing Officer in this case. From this point of law, Assessing Officer/CIT(A) are not correct in making the addition u/s 2(22)(e) of the Act. Accordingly, the relevant ground no.3 and additional ground no.1 & 1.1 are allowed in favour of the assessee.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Disallowance made by the assessee in connection with the clause (ii) of Rule 8D(2) of the Rules. Regarding the Rule 8D(2)(iii), we find same again stands in favour of the assessee by virtue of the order of the Tribunal in assessee’s own case for the assessment years 2009-10 to 2010-11. Accordingly, the relevant ground no.4 and additional ground no.2 – 2.3 are raised by the assessee are allowed.
Disallowance u/s 36(1)(iii) - HELD THAT:- Existence of excessive interest free funds and perusing the order of the Tribunal in assessee’s own case for the assessment year 2010-11 [2017 (12) TMI 1398 - ITAT PUNE] we are of the opinion, the issue raised by the assessee in ground no.5 should be allowed in favour of the assessee.
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2019 (8) TMI 1834 - CESTAT KOLKATA
Denial of CENVAT Credit - Furnace Oil used in the process undertaken for obtaining fuel oil - the process of ‘mixing and blending’ is misdeclared as manufacture of ‘fuel oil’ - Rule 14 of CENVAT Credit Rules 2004 read with section 11A of Central Excise Act, 1944, alongwith applicable interest and equivalent penalty - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- The assessee had duly informed the department about manufacture of the goods, namely ‘Fuel Oil’ and that the appellant shall avail cenvat credit against such inputs to be utilised for manufacture of Fuel Oil. Therefore,the fact regarding availment of duty credit on furnace oil was always in the knowledge of the department. This clearly shows that there was no mala fide intention on the part of the appellant to misuse the benefit of Cenvat Credit as wrongly observed by the Ld. Commissioner.
The assessee has duly shown the availment of credit in ER-1 returns which fact is not in dispute. The Tribunal in COMMISSIONER OF CENTRAL EXCISE, KOLKATA VI VERSUS M/S ITC LTD. [2013 (3) TMI 44 - CESTAT KOLKATA] has observed that if the assessee has disclosed availment of CENVAT Credit in ER-1 returns, suppression of facts cannot be alleged and demand beyond normal period is not sustainable.
Thus, the impugned SCN dated 23.02.2012 issued by invoking extended period of limitation for duty demand for the period February 2007 to March 2008 is hopelessly barred by limitation.
On merits also, there are force in the submission of the appellant that even if it is assumed that the process undertaken by the appellant did not amount to manufacture, the question of levy of duty on the final product did not arise and therefore, no duty demand is sustainable otherwise also.
The Ld. Commissioner in his order, did not follow the Gujarat High Court’s decision in COMMISSIONER OF CENTRAL EX. & CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [2008 (7) TMI 311 - GUJARAT HIGH COURT] for the only reason that in similar circumstances, the Department has filed an appeal before the Hon’ble Bombay High Court against the Tribunal’s decision in NRB BEARINGS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II [2006 (10) TMI 74 - CESTAT, MUMBAI].
The stand taken by the Ld. Commissioner, cannot be agreed upon for the reason that the appeal filed by Department has merely been admitted for hearing and that the decision of the Tribunal as reported in NRB BEARINGS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II [2006 (10) TMI 74 - CESTAT, MUMBAI], has not been stayed and will accordingly hold good.
The Ld. Commissioner committed a fundamental error in not following the Hon’ble Gujarat High Court’s decision which has been duly upheld by the Apex Court.
The appellant is legally entitled to avail Cenvat Credit - the impugned order cannot sustain both on merits as well as on limitation - Appeal allowed - decided in favor of appellant.
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2019 (8) TMI 1833 - PUNJAB AND HARYANA HIGH COURT
TDS u/s 194A - interest on the compensation amount awarded by the Motor Accidents Claims Tribunal - buses belonging to the State of Punjab having met with accidents at various times and compensation having been awarded to the claimants in the context of those accidents, upon payment of which tax was not deducted at source by the State/its agency - HELD THAT:- In the present cases, the claim petition that eventually became subject matter of Execution Case came to be filed by respondents Baljit Kaur and others, on January 17, 2013, before the Motor Accident Claims Tribunal, with the Tribunal having made its Award in favour of the claimants on 11.02.2015.
Thus, if the judgment of the Division Bench of this court in Drawing & Disbursing Officers' case [2011 (3) TMI 1671 - PUNJAB AND HARYANA HIGH COURT] is to be strictly followed, as this Bench is bound to do in any case till 01.06.2015, i.e. till the amendment of clause (ix) and insertion of clause (ixa) in Section 194A(3) of the Income Tax Act, 1961, no interest would be deductible at source at all, even if such interest is beyond Rs.50,000/- in a particular year. Hence, honouring the ratio of the said judgment of the Division Bench, no tax would be deductible at source uptil 01.06.2015, even if such interest exceeds Rs.50,000/- in the financial year 2014-15, and upto 01.06.2015 in the financial year 2015-16.
Therefore, if the petitioner company has paid the interest on compensation to the claimants prior to 01.06.2015, and deposited TDS with the income tax authorities at that time, even where such interest did not exceed Rs.50,000/- in any particular financial year, then such deposit has been made by the company wholly contrary to what has been held by the Division Bench of this court in Drawing & Disbursing Officers' case (supra), (though in my opinion, strictly even in terms unamended clause (ix) of sub-clause (3) of Section 194-A of the Act of 1961, the tax was deductible at source, whether credited or actually paid).
As per applicability of the ratio of that judgment, the claimants cannot be burdened with filing returns seeking a refund, if the fault is that of the company itself (by making an erroneous deduction).
In view of the aforesaid discussion, these petitions are disposed of with the impugned orders in both petitions set aside.
The matters are remanded to the learned Motor Accident Claims Tribunal, Moga, with a direction that if the interest on compensation was paid prior to 01.06.2015, then the petitioner company would pay the claimants the amount of tax it had deducted at source (and seek refund from the income tax authorities if it so desires, by filing a revised income tax return).
However, on the other hand, if the interest on the compensation awarded was actually paid after 01.06.2015, and such interest was of an amount above Rs.50,000/-, the petitioner company would not be liable to pay to the respondent-claimants, the tax deducted at source and paid to the Income Tax Department.
In such a case, it would be the choice of the respondent claimants in each of these petitions, to file an appropriate income tax return for the year concerned, seeking a refund of the tax deducted at source, if such tax/any part thereof, was not actually payable by them on account of them being below taxable thresholds.
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2019 (8) TMI 1832 - BOMBAY HIGH COURT
TP Adjustment - comparable selection - DRP and the Tribunal have found that M/s. Vishal is not comparable with the Respondent - HELD THAT:- Exclusion of M/s. Vishal as a comparable to determine the ALP of its services to its AEs is a finding of fact which is not shown to be perverse. Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained
CG- vak Software Limited as comparable for the purpose determining the Arm's length pricing in the case of assessee - DRP while deciding the Respondent’s application held that M/s. CG Vak could not be excluded from the list of comparable as it did makes profit in the relevant Assessment Year under consideration. This view on facts was upheld by the Tribunal - This concurrent finding of fact by DRP and the Tribunal has not been shown to be perverse. Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained.
Substantial question of law or fact - We find that this appeal as filed by the Revenue seeks to challenge concurrent finding of facts arrived at by the DRP and the Tribunal. In fact, no perversity in the impugned order is even attempted to be shown by the Revenue. The appeal is filed in a normal course, without considering the issue whether the impugned order gives rise to a substantial question of law, to be challenged in appeal.
Revenue continues to file appeals in respect of the Transfer Pricing issue as a matte of routine and/or standard operating procedure even when no substantial question of law arises. We trust that the authorities would examine this issue at the highest level and ensure that no unnecessary appeals such as this, which are factual in nature, without being perverse are, filed to this Court. We direct the Registry to forward a copy of this order to the CBDT, so that the appropriate directions can be given to the Commissioners of Income Tax.
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2019 (8) TMI 1831 - ITAT MUMBAI
Depreciation on an amount paid to DoT for purchase of 3G Spectrum - AO was of the opinion that said capital expenditure on account of acquisition of 3G Spectrum fees is covered under Section 35AAB of the Act and is required to be amortized as per provisions of Section 35ABB of the Act over the period of 20 years for which 3G Spectrum has been allocated and accordingly disallowed the depreciation claim - HELD THAT:- We noted that this issue is squarely covered by the co-ordinate bench decision of Idea Cellular Limited. [2017 (12) TMI 660 - ITAT MUMBAI]. Following the co-ordinate Bench decision, we allow this issue of assessee’s appeal.
TDS u/s 194J - payment made towards roaming charges/ services provided by other telecom services - Non deduction of TDS - Addition u/s 40(a)(ia) - HELD THAT:- As decided in own case [2016 (6) TMI 174 - ITAT MUMBAI] roaming / inter– connectivity charges paid by the assessee to other telecom networks not being in the nature of fees for technical services will not attract the provisions of section 194J. That being the case, assessee was not required to deduct tax at source on payment of roaming charges in terms of section 194J. In view of the aforesaid, we quash the demand raised under sections 201(1) and 201(1A) - Decided in favour of assessee.
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2019 (8) TMI 1830 - SC ORDER
Addition u/s 68 - failure to discharge burden of proof in proving the cash credits - whether the explanation furnished in the opinion of the Assessing Officer is satisfactory or not? - As per HC satisfaction of the officer no doubt has to be based on the material so placed by the parties, which in the instant case is there. Formation of opinion has to be after accounting for all the factors and that too on objective consideration of which we have no doubt - HELD THAT:- We do not see any reason to interfere in the matter. The special leave petitions are, accordingly, dismissed.
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2019 (8) TMI 1829 - SUPREME COURT
Transfer and Acquisition of Land - Acquisition and distribution of land held in excess of ceiling - restrictions of transfers - principal plea, which found favour with the appellate authority, was that the Partition Deed dated 31.1.1970 was against the principles of Hindu law to the extent it gave a share to minor daughters in ancestral land - alienation of properties to minor daughters, and that a female child - HELD THAT:- In view of difference of opinions and the distinguishing judgments (Hon'ble Sanjay Kishan Kaul, J. allowed the appeal and Hon'ble K.M. Joseph, J. dismissed the appeal), the matter be placed before Hon'ble the Chief Justice of India for referring the matter to a Larger Bench.
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2019 (8) TMI 1828 - ORISSA HIGH COURT
Validity of suo motu orders of revision - revision of trade discount given by the petitioner - validity of credit notes issued by the petitioner to its dealer - fresh demand of tax - HELD THAT:- Reliance placed in the Hon’ble Supreme Court in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Ernakulum v. Motors Industries Company, [1983 (2) TMI 251 - SUPREME COURT] held that “ all amounts allowed as discount either in accordance with regular practice or in accordance with agreement would be deductible from the total turnover provided they are duly supported by the entries in the accounts of the assessee.
There are sufficient force in the contentions raised by the learned counsel for the petitioner and it is opined that the issue involved in these two writ petitions are squarely covered by the decisions relied upon by the learned counsel. In that view of the matter, since the matter is covered, it is deemed appropriate to allow the writ petitions by quashing the impugned orders.
The amounts paid by the petitioner and the amounts paid by virtue of the interim orders of this Court dated 11.07.2006 in both the writ petitions are directed to be refunded - petition disposed off.
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2019 (8) TMI 1827 - ITAT CHENNAI
Disallowance u/s 36(1)(iii) - partial relief was granted by the ld. CIT(A) after considering the additional evidence filed - HELD THAT:- From the perusal of the assessment order, it is clear that the addition on account of interest was made on the ground that interest component was not included in the closing work in progress whereas from the order of the ld. CIT(A) relief was granted under the provisions of Section 36(1) (iii) - CIT(A) has granted relief on all together on different premises from that of the Assessing Officer. Therefore in such circumstances, the only recourse available to the ld. CIT(A) is to grant an opportunity of hearing to the Assessing Officer before deleting the addition. The matter should be remanded back to the file of the ld. CIT(A) to decide the issue in proper prospective in accordance with law. Thus, the ground of appeal No.2 raised by the Revenue is partly allowed for statistical purpose.
Addition made u/s.56(2) (viia) - CIT(A) granted relief after considering the fact that the difference of fair market value and the value adopted by the Assessing Officer is less than 1% - HELD THAT:- Nothing was brought to our notice controverting the findings of the ld. CIT(A). In these circumstances, we uphold the order of the ld. CIT(A) in this issue. Accordingly, grounds of appeal 3 & 4 raised by the Revenue stand dismissed.
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2019 (8) TMI 1826 - ITAT KOLKATA
Disallowance of additional depreciation on energy saving devices - HELD THAT:- We find that there are no additions during the year to the block of assets where the rate of depreciation is at the rate of 80%. The assessee has claimed the depreciation on the opening written down value as on 01/04/2010.
Later as quoted the order of the jurisdictional Bench of the ITAT in the case of Damodar Valley Corporation [2016 (7) TMI 747 - ITAT KOLKATA] and upheld the claim of the assessee. We find no infirmity in the same. The submissions of the ld. D/R that this case-law does not refer to a period prior to 01/04/2013, the date on which the amendment has come into effect, is not correct. Hence, we uphold the findings of the ld. CIT(A) and dismiss this ground of the revenue.
Disallowance u/s 14A r.w.r. 8D - CIT(A) held that the assessee company has duly discharged the onus by proving that loan funds were utilised for business purpose and not for making any investments - HELD THAT:- We uphold these findings and dismiss this ground of the revenue as the factual findings of the ld. CIT(A) have not been controverted by the ld. D/R as held when no dividend income was earned from the investments during the year, then no disallowance can be made u/s 14A of the Act with reference to cost of such investments - Disallowance made by AO set aside - Decided in favour of assessee.
Disallowance of foreign exchange fluctuation loss - HELD THAT:- MTM loss recognized at the year-end with reference to unrealized forward contracts was in the nature of real loss and therefore allowable as deduction from the profits of the business.
Disallowance of recruitment expenses - HELD THAT:- In the instant case, the assessee did not want to spread over of this expenditure over a period of five years as in the return field by it, it had claimed the entire interest paid upfront as deductible expenditure in the same year. In such a situation, when this course of action was permissible in law to the assessee as it was in consonance with the provisions of the Act which permits the assessee to claim the expenditure in the year in which it was incurred, merely because a different treatment was given in the books of account cannot be a factor which would deprive the assessee from claiming the entire expenditure as a deduction. It has been held repeatedly by this Court that entries in the books of account are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act.
Disallowance of delayed contribution of EPF/ESI - HELD THAT:- As the amounts in question have been paid by the assessee before the due date of filing of the return u/s 139(1) of the Act, the ld. CIT(A) rightly followed the decision of the Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and deleted the addition. Thus, this ground of the revenue is dismissed.
TP Adjustment on account of recharacterisation of equity as loan - HELD THAT:- The term 'income' has to be understood as per the provisions of Section 2(24) of the Act and therefore capital receipts/ transactions will not fall within the ambit of 'income. The Hon'ble Court [2014 (10) TMI 278 - BOMBAY HIGH COURT] thus held that the amount received on issue of share capital including the premium is undoubtedly on capital account. Therefore, absent express legislation, no amount received, accrued or arising on capital account transaction can be subjected to tax as 'income'. The Hon'ble High Court therefore agreed with the assessee's case that capital receipts received by the assessee on issue of equity shares cannot be considered as 'income' and therefore cannot be subject to provisions of Chapter X of the Act. Even though the decision of the Hon'ble Bombay High Court in the context of investment made by foreign holding company in its Indian subsidiary; in my considered view, the ratio decidendi in that decision will equally apply to the appellant's case which is an Indian holding company of its Cyprus subsidiary. Addition to be deleted.
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2019 (8) TMI 1825 - MADHYA PRADESH HIGH COURT
Dishonor of Cheque - petitioner is the Director of the company - company is being let off and under liquidation - simultaneous criminal proceedings of Section 138 of N.I. Act can be proceeded continuously against the company and its director/managing director/employees or not - petitioner/accused/Director of company can be prosecuted for the offence under Section 138 of N.I. Act. in pursuant to business transaction of company or not - Director of company has resigned from his post prior to issuance of cheque - such resigned director can be prosecuted for the offence punishable under section 138 of N.I. Act or not? - vicarious liability of a Director.
When the company is being let off and under liquidation, in these circumstances proceedings of criminal Court under Section 138 of N.I. Act against the company and its Director/Managing Director/officials shall be continued or not? - HELD THAT:- It is found that the company is under liquidation for the purpose of winding up its affairs and distributing assets of company. Nowtherefore, this Court has to read Sections 279, 372 and 373 of Company Act 2013 (Section 446, 586 and 587 of old Company Act, 1956) to resolve this issue as to whether, company can be prosecuted or not? On reading of the above mentioned Sections, it is provided that where an order has been made for winding up, or a provisional Liquidator has been appointed for, a company registered in pursuance of this part, no suit or other legal proceeding shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company, except by leave of the tribunal and except on such terms as the tribunal may imposed - thus, the criminal Court has power to take cognizance on the complaint filed by an aggrieved person to institute proceedings under Section 138 of N.I Act against the Directors of company even if the company is under liquidation and merely on the basis of appointment of liquidator, power of criminal Court could not be curtailed.
Whether the petitioner/accused/Director of company can be prosecuted for the offence under Section 138 of N.I. Act. in pursuant to business transaction of company or not? - HELD THAT:- Section 141 of the Negotiable Instruments Act, 1881 deals with the offences committed by the companies and say that if an offence is committed by a company under Section 138 Negotiable Instruments Act, 1881, every person, at the time, the offence was committed, was in-charge and responsible to the company in the conduct of the business of the company, is liable alongwith the company to be proceeded against and punished accordingly. Further, it is provided that no person shall liable to punishment if he proved that an offence was not committed under his knowledge or he has exercised all dues diligence to prevent to commission of such offence. Looking to the trend set up by the complainants to implead all the Directors, company secretaries, etc., of the accused company, irrespective of whether they were actually involved in the commission of alleged offence or not, the Hon'ble Apex Court has issued several pronouncements to settle the issues.
In the case of Aneeta Hada Vs. Godfather Travels and Tours Private Ltd., [2012 (5) TMI 83 - SUPREME COURT], it has been held that when the company would be prosecuted then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments made in the complaint. To summarize, there cannot be any vicarious liability unless there is prosecution against the company.
Thus, the Director of company shall be prosecuted for business transaction of company under Section 138 of N.I. Act subject to the specific averments in the complaint and after arraying the company, as an accused in complaint. At this stage, it is necessary to be noted that the complainant has made the company as respondent No. 1/accused No. 1 in his complaint.
Whether petitioner/Director namely Santosh can be prosecuted when he has resigned from company prior to issuance of alleged cheques and same were not signed by him? - HELD THAT:- If the Director has already resigned from the company, in such cases, Form 32, under the Companies Act, 1956 comes to an aid. Form 32 is filed with the Registrar of Companies and it indicates the status of the Directors. Thus when a Director resigns and his resignation is accepted by the Company, the Company become obliged to file a Form 32 indicating change in status of the Directors - In the present case the petitioner-Santosh has filed the certified copy of Form 32 u/s. 399 of Companies Act, 2013, dated 06.12.2013, date of issuance is 23.06.2016 (Annexure-D). Further on perusal of Form 32, it is reflected that petitioner has submitted his resignation on 06.11.2013.
It has held in the case of MRS. ANITA MALHOTRA VERSUS APPAREL EXPORT PROMOTION COUNCIL (APPAREL EXPORT PROMOTION COUNCIL) [2011 (11) TMI 532 - SUPREME COURT] that if the person has proved his resignation on the relevant date when the offence has occurred, then the proceedings against such a person are liable to be quashed. It has also been held by the Court that the certified copy of annual return coupled with simple copy of Form 32 should have been accepted as a proof of petitioner's resignation and proceedings against him be quashed.
In almost similar circumstances, in the case of HARSHENDRA KUMAR D. VERSUS REBATILATA KOLEY [2011 (2) TMI 1278 - SUPREME COURT], Hon'ble the Apex Court found that director of that case has resigned prior to issuance of dishonoured cheques. The acceptance of the appellant's resignation is duly reflected in the resolution of company and in the prescribed form (Form 32), the company informed to the Registrar of the Company about his resignation. The Hon'ble Court has found that the cheques were not issued by the appellant/director of that case and he has resigned prior to issuance of alleged cheques. The Hon'ble Court has observed that if in such circumstances, the criminal complaints are allowed to proceed against the appellant, it would result in gross injustice to the appellant.
Thus, if the director of company is succeeded to prove his resignation that he gave the same prior to issuance of alleged cheques, and in the absence of the specific allegations in the averments of the complaint against him, cannot be prosecuted. There is no specific allegations against the petitioner that he was responsible for business affairs of company in day to day manner. There is only allegation against him that he had knowledge about disputed transaction. In the present case, petitioner is succeeded to prove his resignation prior to issuance of cheque and apart from that it is found that he is not the signatory of the alleged cheques and also no specific averments in the complaint against him, therefore, in the present case, complainant has failed to specify the act of the director Santosh in day to affairs, thus, he is entitled to get relief from this court.
Petition allowed.
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