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- 2016 (12) TMI 1859 - ITAT CHANDIGARH
Addition made to taxable income of the assessee by treating the interest accrued on FDR's as income from other sources - Whether the' assessee's business was in a pre-operational stage and the interest had been rightly reduced from the capital work in progress.”? - HELD THAT:- Issue decided in favour of revenue as relying on assessee's own case [2015 (6) TMI 1221 - ITAT CHANDIGARH] - Decided against assessee.
- 2016 (12) TMI 1858 - ITAT MUMBAI
Reopening of assessment u/s 147 - reason to believe - HELD THAT:- Nothing has been recorded by the AO in the ‘Reasons’ about any failure on the part of the assessee to disclose fully and truly all material facts necessary for the impugned assessment. It has nowhere been mentioned by him that which fact or material was not disclosed by the assessee. Thus, vital link between ‘Reasons’ and his findings has not been established by him. This vital link is the safeguard against arbitrary reopening of the concluded assessment. The ‘Reasons’ recorded cannot be supplemented by way of further observations in the assessment order or in any other manner. The validity of the reopening can be examined on the basis of ‘Reasons’ alone and not in supplementary material. Thus, taking into account all the fact....... + More
- 2016 (12) TMI 1856 - ITAT BANGALORE
Interest on FDs - as per DR definitely it is an income earned by the assessee but it has not disclosed it in its return - HELD THAT:- It is clear from the above that as per TDS certificates , the assessee has earned an interest income of ₹ 1,01,72,545/-but it has admitted ₹ 87.78 lakh only as interest income in its Return. Thus, this issue requires verification & reconciliation and hence we set aside this issue to the AO . The AO after giving adequate opportunity to the assessee would decide this matter in accordance with law. Negative cash balance - CIT(A) after considering normal trading pattern of the assessee prior and subsequent to March, the remand report and the purchase statement obtained from PEC Ltd etc held that if purchases and sales were entered as and when they took place, the negative cash balance would not ....... + More
- 2016 (12) TMI 1849 - ITAT CHENNAI
Nature of expenditure - power and fuel charges - assessee bear cost of additional power infrastructure to be established by electricity supplier - AR submitted that when the outgo did not create any asset for the assessee it was a revenue expenditure allowable u/s.37(1) - HELD THAT:- There is no dispute that there was a agreement between assessee and M/s. Ford India Pvt. Ltd by which latter leased out a property to the assessee. M/s. Ford India Pvt. Ltd was to supply electricity to the assessee for the factory in the leased property based on a shared services agreement. M/s. Ford India Pvt. Ltd had given notice to the assessee for terminating the shared supply agreement w.e.f. 1st January, 2009 is also not doubted. Electricity was an essential input for carrying on the manufacturing activity of the assessee and there can be no two opinion....... + More
- 2016 (12) TMI 1847 - ITAT HYDERABAD
Addition on account of estimation of profit @ 6% of sales - HELD THAT:- As relying on own case [2015 (6) TMI 1157 - ITAT HYDERABAD] we set aside the order of the CIT(A) and delete the addition made on this count. Accordingly, ground are allowed. Disallowance of deduction claimed u/s 80U - HELD THAT:- Considered the rival submissions and perused the material facts on record. As the assessee himself withdrawn the claim before the AO, the CIT (A) was right in rejecting the assessee’s claim and hence, we uphold the order of the CIT(A) on this issue and dismiss the grounds raised in this regard.
- 2016 (12) TMI 1846 - ITAT AHMEDABAD
Addition u/s. 2(22)(e) - assessee was the major share holder/director of the company and also had entered into financial transaction with Kadam Exports (P) Ltd - non deduction of TDS - ITAT cancelling the order passed u/s 201(1) and 201(A) - HELD THAT:- As decided in SCHUTZ DISHMAN BIO-TECH PVT. LTD.[2016 (1) TMI 84 - GUJARAT HIGH COURT] Commissioner as a matter of fact found that the payments were not in the nature of current adjustment. There was movement of fund both ways on need basis. The transactions in the nature of loans and advances are usually very few in number whereas in the present case, such transactions are in the form of current accommodation adjustment entries. Commissioner therefore, held that the transactions were not in the nature of loans and advances. The Revenue carried the matter in appeal. The Tribunal concurred w....... + More
- 2016 (12) TMI 1845 - ITAT CHENNAI
Changing of status of the assessee while processing return under Section 143(1) - As in the course of processing the returns, the Assessing Officer changed the status of the assessee as AOP and levied tax under Section 164(1) of the Act at maximum marginal rate - HELD THAT:- The assessee admittedly filed their returns of income electronically and the same were processed under Section 143(1) of the Act. Section 143(1) of the Act enables the Assessing Officer to make prima facie adjustment on the basis of the material available on record. Changing of status is something outside the purview of the prima facie adjustment under Section 143(1) of the Act. Therefore, this Tribunal is of the considered opinion that changing of status of the assessees cannot be made while processing return under Section 143(1) of the Act. Therefore, this Tribunal ....... + More
- 2016 (12) TMI 1840 - ITAT CHENNAI
Status of assessee - period of stay in India - Not Ordinarily Resident in India - adjustments u/s. 143(1) - error in Form-16 - perquisites taxable under the Income-tax Act - stock options income accrued and received outside India - assessee was employed in USA during the period August 2000 to October 2008 - exemption claimed by the assessee towards receipt said to be sale of stock options granted in the U.S.A while he was working in Google Inc. USA.- HELD THAT:- If any incorrect claim, if such incorrect claim is apparent from any information in the return, he should correct the same while processing the return u/s.143(1) of the Act. In the instant case, the assessee claimed exemption of substantial amount which was in the form of sale of stock option in USA. The Form No.16 annexed to the return of income issued by the present employee of ....... + More
- 2016 (12) TMI 1839 - ITAT MUMBAI
Disallowance u/s 43B - disallowance of interest claimed on OD/CC Account u/s 43B(d)/(e) r.w. Explanation 3D - CIT-A deleted the addition - HELD THAT:- Tribunal repelled the said plea by interpreting Section 43B and held that overdraft/cash credit accounts are not similar to loan accounts. Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disallowance made u/s 43B. A bare reading of Explanations 3C and 3D to Section 43B provides an answer to the problem by making it clear that where interest amount has not been converted into loan or borrowing (or) loan or advance, as the case may be, there is no question of denying the benefit of deduction. In the case on hand, the interest amount has been actually paid by the assessee through Overd....... + More
- 2016 (12) TMI 1838 - ITAT MUMBAI
Deduction u/s 80P in respect of interest received from the schedule bank - HELD THAT:- As decided in own case , [2016 (5) TMI 1545 - ITAT MUMBAI] as relying on QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY LTD. [2015 (6) TMI 573 - BOMBAY HIGH COURT] where assessee-cooperative society could not be regarded as “Cooperative Bank‟ on, mere fact that an insignificant proposition of revenue was coming from non-members, and thus, was entitled for deduction under section 80P(2)(a)(i) - Decided against revenue.
- 2016 (12) TMI 1834 - ITAT CHANDIGARH
Rejection of the books of account u/s 145(3) - application of net profit rate of 12% - HELD THAT:- Identical issue have been considered by ITAT Chandigarh Bench in the case of the assessee, in preceding assessment years 2005-06, 2006-07 and 2008-09. The Assessing Officer has recorded several reasons for rejection of the books of account in the assessment years which have not been disputed by ld. counsel for the assessee. The ld. counsel for the assessee did not challenge rejection of the books of account under section 145(3) of the Act, therefore, findings of authorities below to that extent are confirmed. Following history of the assessee, it would be reasonable and appropriate to direct the Assessing Officer to apply NP rate @ 6% as against 12% adopted by the authorities below.
- 2016 (12) TMI 1833 - ITAT AHMEDABAD
Disallowance of interest expenses - interest @ 15% p.a. on advances given to various parties on which no interest has been charged - HELD THAT:- Interest-free own funds available at the disposal of the assessee stands at ₹ 352.91 lakhs as on 31/03/2008 and ₹ 507.94 lakhs as on 31/03/2009. The corresponding interest-free advance as on 31/03/2009 stands at ₹ 21.10 lakhs. In such a situation, where interest-free own funds available to the assessee are far in excess of the interest-free advance, the presumption would arise in favour of assessee that the advances were made from interest-free funds available with the assessee. On this issue, we find guidance from the judgement of Hon’ble Bombay High Court in the case of CIT vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] - In view of the huge f....... + More
- 2016 (12) TMI 1831 - ITAT CHENNAI
Disallowance of interest paid on loans - Assessee claimed interest on accrual basis - Right to claim deduction on the basis of earlier assessment - Whether said interest was accrued on the loans borrowed in earlier years and there is no actual payment of this interest to the parties? - as per AO assessee has not shown the parties for which the loans were borrowed and the interest was disallowed - HELD THAT:- Assessee has borrowed the amount for the purpose of investment in other firms as capital of the assessee - when the assessee borrowed funds for the purpose of investment in other partner firms, it cannot be allowed as deduction as income earned from firm is not feasible while computing the income of the assessee. This view is fortified by the judgment of Popular Vehicles and Services Ltd.[2009 (10) TMI 574 - KERALA HIGH COURT] - in ea....... + More
- 2016 (12) TMI 1830 - ITAT CHENNAI
Carry forward of additional depreciation - Additional depreciation of 10% on plant and machinery as purchased and put to use in the previous year u/s 32(1)(iia) - HELD THAT:- In so far as claim of carry forward of additional depreciation to the extent it could not be allowed in earlier year due to use lesser than 180 days, no doubt there are decisions of Co-ordinate Bench which are for and against the assessee. In our opinion the issue is no more res integra due to the judgment in the case of Rittal India Pvt. Ltd [2016 (1) TMI 81 - KARNATAKA HIGH COURT]. Intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to only half of the same being granted in one assessment year, if certain condition was not fulfilled. But, that, in our considered view, w....... + More
- 2016 (12) TMI 1829 - ITAT JAIPUR
Treatment of the interest received prior to commencement of commercial operations of the specified mega road projects - Income from other sources or capital gain - As per the assessee, it is in the nature of capital receipt and will be required to be set off against the pre-operative expenditure capitalized under the head “Capital work in progress” and the same cannot be brought to tax under the head “income from other sources.”- HELD THAT:- Respectfully following the decision of Coordinate Bench in assessee’s own case [2016 (9) TMI 957 - ITAT JAIPUR] we hold that the interest received prior to commencement of commercial operations of the specified mega road projects will be in the nature of capital receipt and will be required to be set off against the pre-operative expenditure capitalized under the head &ld....... + More
- 2016 (12) TMI 1825 - ITAT MUMBAI
Penalty u/s 271(1)(c) -Tribunal has held that the commission should be taken at 0.15% and the expenditure claimed should be restricted and allowed to the extent of 50% from such income - HELD THAT:- We find that the co-ordinate Bench of the Tribunal has directed the AO to take commission at the rate of 0.15% and allow the expenses to the tune of 50% of the said commission and bring to tax the amount so worked out. Further, we find that on the identical facts the penalty has been deleted by the co-ordinate Bench of the Tribunal in M/S. GOLDSTAR FINVEST PVT. LTD. VERSUS THE DCIT- CENTRAL CIRCLE -46, MUMBAI2016 (8) TMI 1502 - ITAT MUMBAI]. Accordingly, we set aside the order of the ld.CIT(A) and direct the AO to delete the penalty. Appeal of the assessee is allowed.
- 2016 (12) TMI 1819 - ITAT CHENNAI
Transfer Pricing adjustments - engineering services rendered by the assessee to its Associated Enterprises abroad - imputing of interest on alleged delay in collection of receivables from Associated Enterprises. - Disallowances of employee’s contribution to Provident Fund - Disallowance u/s.14A - working capital adjustment - HELD THAT:- In so far as imputing interest on delayed payment from Associated Enterprise was concerned, observation of the ld. DRP was that the extended payment terms given to Associated Enterprise without charging interest was exigible to a transfer pricing adjustment, even if commercial expediency was shown by the assessee. As for assessee’s claim for depreciation on goodwill, observation of the ld. DRP was that no such disallowance made by the ld. Assessing Officer and no claim was preferred by the asse....... + More
- 2016 (12) TMI 1816 - ITAT DELHI
Reopening of assessment - Addition u/s 68 - non independent application of mind - HELD THAT:- AO had issued notice u/s 148 of the Act only on the basis of information received from CIT, Central-1, New Delhi and not on the basis of reasons recorded by him by applying his own mind. Therefore notice issued u/s 148 of the Act was not valid and the reassessment framed deserves to be quashed. As regards to the merit of the case is concerned, it is not in dispute that the assessee furnished the confirmation from the share applicants to whom shares were allotted, the amount was received by the assessee through banking channels. The addition was made simply on this basis that the notice issued u/s 133(6) were received back and the assessee was unable to produce principal officer/director of the investor companies. However, the explanation of the a....... + More
- 2016 (12) TMI 1815 - ITAT CHENNAI
Nature of loss - Loss arising swap currency forex derivative - swap currency forex derivative entered into with Axis Bank Ltd. relating to principal amount of loan of ₹.10 crores - speculative loss or business loss - HELD THAT:- In this case, the value of loan was taken into consideration at exchange rate of ₹.43.1200 for US Dollar, US Dollar to Swiss Franc 1.2206 and from Swiss Franc to Indian rupees at 35.3269. The term loan was converted as a forex derivative for operation of the forex derivatives and while converting for operation of currency swap, the assessee has claimed loss of ₹.1,95,56,190/-. The assessee has also earned interest of ₹.10,39,561/- and had to pay as a settlement for currency swap amount of ₹.1,32,90,556/- and on account of currency option i.e., against US Dollar ₹.73,05,194/- to ....... + More
- 2016 (12) TMI 1813 - ITAT AHMEDABAD
TP Adjustment - rejection of CUP as the most appropriate method - Comparable selection - selection of Petronet LNG Limited and Gas Authority of India Ltd. as comparables for RPM - HELD THAT:- In consideration of the criteria prescribed by the Rules, nature, class of the services rendered and the availability, coverage and reliability of data necessary, and guidelines issued by the OECD in this regard, inter alia, RPM is considered was being the “most appropriate method” to determine the arm’s length value of the transaction pertaining to purchase of LNG. The assessee and Indian Oil, Bharat Petroleum, ONGC and GAIL, or, for that purpose, any other public sector undertaking, cannot be said to be associated enterprises. In the cases of public sector companies, even as all or majority of shareholdings may be by the Union or ....... + More