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Income Tax - Appellate Tribunal - Case Laws
Showing 1 to 20 of 492 Records
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2021 (8) TMI 1371
Depreciation at the rate of 60% on computer based equipment, which was restricted to 15% by the AO - HELD THAT:- CIT(A) has allowed the claim of assessee in full after following the order of First Appellate Authority for AY 2011-12. It is further observed that the AO has himself allowed assessee’s claim of depreciation @ 60% on computer based equipment in AY 2014-15 From perusal of the impugned order it is gathered that the issue is perennial. In AY 2005-06, 2007-08 and AYs 2009-10 to 2011-12 the CIT(A) had allowed assessee’s similar claim of depreciation on computer based equipments. In appeal by the Revenue, the Tribunal confirmed the order of First Appellate Authority. No infirmity in the impugned order, the same is upheld and the appeal of Revenue is dismissed, sans merit.
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2021 (8) TMI 1370
Income deemed to accrue or arise in India - sale value of software and provision of ancillary support services as royalty receipts/FTS income - assessee is a company incorporated in the United States of America as engaged in the business of developing, manufacturing and distribution of software products from outside India and also providing ancillary support services from outside India - HELD THAT:- As following the decision rendered in the case of Engineering Analysis Centre for Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] and also following the decision rendered by the co-ordinate bench in AY 2016-17 [2021 (7) TMI 615 - ITAT BANGALORE] we hold that receipts by way of sale of software licenses and provision of ancillary support services connected with the sale of software products cannot be assessed as royalty/FTS income in the hands of the assessee. Accordingly, we set aside the order passed by the AO on this issue. Appeal filed by the assessee is allowed.
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2021 (8) TMI 1369
Income deemed to accrue or arise in India - receipt from Indian customer towards sale of software would constitute royalty within the meaning of section 9(1)(vi) of the Income-tax Act and Article 12 of the DTAA between India and USA - whether the receipts from Indian customers towards annual maintenance service, implementation and consultancy services can be brought to tax as fees for technical services? - HELD THAT:- Issue in question is squarely covered in favour of the assessee by the judgment of Engineering Analysis Centre of Excellence P.Ltd. [2021 (3) TMI 138 - SUPREME COURT] wherein it was categorically held that sale of software would not constitute royalty within the provisions of section 9(1)(vi) of the I.T.Act and Article 12(4)(a) of the DTAA between India and USA. Amounts received towards annual maintenance services, implement....... + More
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2021 (8) TMI 1367
Income deemed to accrue or arise in India - taxability of software sale by the US entity to Indian entities - PE in India - sale of Novell Software Products as 'Royalties' on substantive basis both under the Income-tax Act as well as the India-USA DTAA - whether the receipts from sale of Novell Software Products being in the nature of business income and in the absence of Permanent Establishment ('PE') of appellant in India, the receipts from sale of Novell Software Products ought to have been considered as not taxable in India - HELD THAT:- So far as taxability of software sale by the US entity to Indian entities is concerned learned representatives fairly agree that the said issue is now covered by case of Engineering Analysis Centre of Excellence (P.) Ltd. [2021 (3) TMI 138 - SUPREME COURT]. The transactions in question....... + More
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2021 (8) TMI 1365
Validity of reassessment proceedings u/s 147 - Addition u/s 68 - Independent application of mind v/s borrowed satisfaction - argument submitted that the reassessment proceedings in the instant case is based on borrowed satisfaction based on the conclusion drawn by Investigation Wing - HELD THAT:- When there is non-application of mind by the AO to the report of the Investigation Wing, such reassessment proceedings are not in accordance with law and such reopening proceedings have been quashed. Since, in the instant case, the AO has not applied his mind as there is non-identification of the deponents, non-mentioning of middleman if any, absence of details in the form of instrument number through which the cheques/RTGS was accepted by the assessee company, name of the bank from which the accommodation entries were provided, the name of the b....... + More
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2021 (8) TMI 1362
TP Adjustment - Comparable selection - Computation of margin of the comparable companies adopted by the TPO - HELD THAT:- On perusal of the financial, it is clear that comparable company, namely, Priya International Limited is having three segments for the relevant assessment year also. Out of the total revenue for the relevant assessment year, the sale of software/electronics is only to the tune - AO/TPO is directed to adopt the margin of Priya International Limited with regard to the segment of electronics alone. TP adjustment by directing the TPO to re-compute the arm's length price in the case of the Appellant at entity level - HELD THAT:- Bangalore Bench of the Tribunal in the case of IKA India Private Limited [2018 (10) TMI 49 - ITAT BANGALORE] had held that as per section 92 the transfer pricing adjustment has to be made with r....... + More
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2021 (8) TMI 1361
TP adjustment - MAM selection - determination of ALP in respect of the international transaction of purchase of stock - in- trade by the Assessee from its AE - assessee aggregated and benchmarked the transactions of purchase of consumables, raw materials, stock-in-trade and capital assets by selecting Cost Plus Method (CPM) as Most Appropriate Method (`MAM') and the overseas AE as tested party - Assessee submitted that the TPO ought not to have rejected the claim of the Assessee that RPM was the MAM for determination of ALP - HELD THAT:- A method for determining arm’s length price, to be held as a ‘most appropriate method’ (MAM), should be, as provided in rule 10C(1). A method "which is best suited to the facts and circumstances of each particular transaction" and a method and "which provides the most ....... + More
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2021 (8) TMI 1360
TP Adjustment - computation of assessee’s own PLI - As submitted foreign-AE being least complex entity, should be taken as tested party for the purpose of benchmarking - HELD THAT:- AEs were providing marketing services in overseas markets against lump-sum fees. Therefore, the selling and marketing expenses incurred in domestic segment were rightly allocated to non-AE sales by the assessee. There was no justification to allocate the same to AE segment. So far as the compensation for use of premises is concerned, we are of the opinion that this expenditure would mostly be fixed in nature and would bear no relation with the turnover. The same has to be incurred irrespective of quantum of turnover. On the other hand, if the number of employees were more, the assessee would require larger premises and the expenditure would be more. Thus....... + More
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2021 (8) TMI 1359
TP adjustment on brand royalty computed by authorities below - HELD THAT:- As per the aforesaid provisions, consideration for transfer of rights (including granting of a licence) in respect of a trade mark or similar property or for use of a trademark or transfer of rights (including granting of a licence) in respect of any copyright, literary, artistic or scientific work, falls under the definition of ‘Royalty’ under the IT Act. The revenue has not been able to produce any agreement to establish the payment of royalty by the associated enterprises to assessee. It is also not been established that by the use of brand “Sasken” the subsidiary associated enterprises were able to get premium price which could be ultimately translate into profits to pay royalty. Admittedly, in the present facts of the case, assessee has....... + More
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2021 (8) TMI 1358
TP Adjustment - comparable selection - HELD THAT:- Acropetal Technologies has been held to be into products and that RPT is at 18.66% which is beyond the marginal limit of 15% for year under consideration, by this Tribunal, in case of Electronics for Imaging India Pvt.Ltd for assessment year 2011-12 [2017 (7) TMI 1335 - ITAT BANGALORE] We therefore do not find any this comparables to be functionally similar with assessee. E- Infochips Ltd. does not satisfy service income filter being 75%. We therefore, do not see any reason to set aside this company to Ld.TPO. Therefore, respectfully following view taken by coordinate bench of this Tribunal in DCIT vs M/s CGI Information Systems and Management Consultations Pvt.Ltd. [2018 (4) TMI 567 - ITAT BANGALORE] we direct Ld. TPO to exclude this company. ICRA Techno Analytics Ltd., E-Zhest Solutions....... + More
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2021 (8) TMI 1357
Exemption u/s 11 - treating unutilized amount of grant received from “Essar Limited” - claim towards actual application of income in the immediately next financial year - HELD THAT:- We find that the law permits availability of deduction u/s 11(1) of the Act where the assessee has successfully demonstrated the application of income in the immediately subsequent financial year. Inconsistency in taking shelter of either Section 11(1) or Section 11(2) of the Act, in our view, is not fatal for the purposes of granting tax relief to a charitable trust engaged in benefit of public at large. The substantial compliance of the conditions laid down in the respective provision is of overriding importance. The assessee, in the instant case, claimed that, on facts, it has complied with the provisions of Section 11(1) of the Act read with E....... + More
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2021 (8) TMI 1355
Taxability of shipping income - Income deemed to accrue or arise in India - Income being 7.5% of total freight collections derived from operation of ships in international traffic - business connection or Permanent Establishment (PE) of the Appellant in India - benefit of Article 8 of the Double Taxation Avoidance Agreement between India and UAE (Tax Treaty) - whether benefit of article 8 can be declined in respect of freight collections earned from cargo/containers loaded on slot of other vessels that the OEL, FZCO was entitled to under the joint business/pooling arrangements? - HELD THAT:- DRP fairly accepts the issue is covered, in favour of the assessee, by Hon’ble jurisdictional High Court’s judgement in the case of Balaji Shipping [2012 (8) TMI 681 - BOMBAY HIGH COURT]. The mere fact that an appeal against the said judge....... + More
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2021 (8) TMI 1354
Disallowance of interest u/s. 57 (iii) - proportionately disallowing interest on borrowing invoked alleging that entire borrowed funds were not utilized for the purpose of investment in partnership concerns - under the arbitration settlement with the partners, the assessee had to accept rights in respect of three flats in an under construction project at a somewhat high value - HELD THAT:- As rightly held by the assessee in respect of three flats, which are valued by the arbitrator at Rs. 3.25 crores, cannot be considered in isolation with assessee’s investment in the firm. The investment made by the assessee in the firm, to that extent, remains in existence-through in a different form because of the compulsion of a binding arbitration award rather than choice of the assessee. In this view of the matter, the disallowance is devoid of legally sustainable and factually correct basis. Therefore, direct the Assessing Officer to delete the impugned disallowance
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2021 (8) TMI 1349
TP adjustment - comparable selection in the ITeS segment - HELD THAT:- As far as exclusion of Infosys Ltd., is concerned, the decision of the ITAT Hyderabad Bench [2018 (6) TMI 505 - ITAT HYDERABAD] cited by the learned Counsel for assessee supports the pela for exclusion. Hence, we direct exclusion of Infosys Ltd., as a comparable company. As far as exclusion of Cross Domain Solutions Pvt. Ltd., we notice that this company renders diversified Knowledge Process Outsourcing (KPO) providing services in insurance, health care, HR and accounting domains. In the decision cited by the learned DR, the assessee was also in KPO services of providing engineering design services. The assessee in this appeal is a Business Processing Outsourcing Services which are routine in nature and not in the nature of a knowledge process outsourcing. Therefore we....... + More
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2021 (8) TMI 1345
Benefit of Vivad Se Vishwas Scheme, 2020 - HELD THAT:- As submitted by assessee, after re-evaluating the decision whether to opt for Vivad Se Vishwas Scheme, 2020, the assessee ultimately decided against it and preferred to pursue the appeal. In view of the fact that the assessee has decided against availing the benefit of the Vivad Se Vishwas Scheme, 2020 and wants to pursue the present appeal, we are inclined to recall the order [2020 (12) TMI 1352 - ITAT MUMBAI] and restore the appeal to its original position. Registry is directed to fix the appeal for hearing in due course before the assigned Bench. Fresh date of hearing of the appeal should be intimated to both the parties.
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2021 (8) TMI 1336
Validity of assessment u/s 153A - Requirement of prior approval of the Joint Commissioner u/s 153D - Whether CIT(A) has erred in law by upholding the alleged approval u/s 153D being illegal, bad in law and without any application of mind and the Assessment order is passed without obtaining requisite approval? - HELD THAT:- As approval was received in the office of the Assessing Officer on 28.7.2016, whereas the Assessment Order was passed by the AO on 27.7.2016. In the remand report, the Assessing Officer had submitted that in the era of technology where communication between the persons via phone /fax, date of receipt of physical letter by post is immaterial. In our considered opinion, the requirement of Section 153D is clear and unambiguous, which requires prior approval of the Addl. CIT before passing the order by the Assessing Officer....... + More
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2021 (8) TMI 1334
TP Adjustment - comparable selection - exclusion of Infosys Ltd., as a comparable company - turnover filter - HELD THAT:- As relying on Autodesk India Pvt. Ltd. [2018 (7) TMI 1862 - ITAT BANGALORE] we are of the view that the CIT(A) ought to have excluded Infosys Ltd., as a comparable company by applying the turnover filter. We direct that this company should be excluded as a comparable company. Excluding Persistent Systems Ltd. - Persistent Systems Ltd. was excluded from the list of comparable companies on the ground that these companies were engaged in diversified activities and earning revenue from various activities including licensing of products and income from maintenance contracts and there was no segmental reporting so that the operating margins of SWD services of this company can be compared with the assessee. In the light of th....... + More
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2021 (8) TMI 1328
Weighted deduction u/s 35(2AB) - Claim Denied on expenditure incurred for Research and Development on the ground of Non furnishing of Certificate in Form 3CL from Department of Scientific and Industrial Research (DSIR) - HELD THAT:- Both the lower authorities have rejected the same for the sole reason that the then taxpayer had failed to file corresponding Form-3CL issued by the prescribed authority i.e., Department of Scientific and Industrial Research ‘DSIR’. Case file indicates that the assessee has filed its additional evidence petition dt.08-10-2020 placing on record the DSIR’s approval in Form- 3CI, dt.28-11-2017 whereas the CIT(A)’s order under challenge is dt.30-10-2017. We therefore deem it appropriate to restore the instant former issue back to the Assessing Officer to be examined afresh in light of the D....... + More
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2021 (8) TMI 1321
Disallowance u/s. 36(1) - interest on housing loans - HELD THAT:- As decided in own case [2019 (12) TMI 1600 - ITAT DELHI] assessee stated that 62.75% in on account of interest on long term housing loan and worked out applying that percentage on the total business income calculated a sum of Rs. 549834543/- pertaining to long term housing loan and computed deduction @20% of Rs. 10.99 crores as deduction. AO changed the above ratio from 62.75 % to 55.89% as he considered the total receipt of business for the purpose of working out proportion. In the present case the methodology adopted by the assessee is consistently followed for last eight years. Same was accepted by the revenue without any objection. The only issue is with respect to how the profit of the business for the purpose of long term housing finance shall be worked out. The only ....... + More
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2021 (8) TMI 1316
Assessment u/s 153A - benami income arising out of the sales and purchases transactions of 70 entities as assessed in the hand of assessee - reliance on pen-drive as found during the course of search proceedings - HELD THAT:- As no substance could be found in the plea that the pen-drive did not belong to the assessee or the same was not found from assessee’s premises particularly when the contents of the pen drive completely matched with incriminating material found during the course of search operations. The seizure of the same was duly recorded in the Panchnama which was vouched by independent Panchas. The vital link was established between the pen drive and the estimate sheets as well as the regular books of benami concerns being run by the assessee. Therefore, we do not find any substance in this plea as raised by Ld. AR before ....... + More
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