- 2017 (2) TMI 1482 - ITAT MUMBAI
MAT credit available u/s 115JAA of tax paid along with surcharge and education cess - Surcharge and education cess as part of the income-tax - HELD THAT:- As noted from the above working that first of all tax amount has been computed on the total income of the assessee. Thereafter surcharge and education cess has been worked out upon the tax liability. Then, from the gross amount so arrived at, the amount of credit available u/s 115JB on account of income-tax, surcharge and education cess (all combined together) have been deducted and accordingly, net tax payable after setting off credit available u/s 115JB has been worked out. In our view, this is the correct method of computing tax liability as well as credit available u/s 115JAA. Accordingly, we direct the AO to verify the facts as have been given in the aforesaid working and compute the tax liability accordingly and allow the necessary relief to the assessee
- 2017 (2) TMI 1481 - ITAT MUMBAI
Estimation of income - bogus purchases - CIT(A) applying estimated net profit @ 12.5%. on the above transactions - HELD THAT:- As assessee fairly agreed that a reasonable estimate of profit should be estimated in view of the fact that neither manufacturing of moulds nor sale of moulds is under dispute. According to us, assessee had made purchase but from grey market. We find that the similar finding were given by the CIT(A) that assessee might have purchased extra profit on account of saving of sales tax and other tax. Even by purchasing from grey market, assessee might have save some profits and profit of the assessee has depicted in the above chart which is minimum at the rate of 3.90% and maximum of 9.85%. We are of the view that a reasonable estimate on profit rate at 10% will suffice the issue. Accordingly, we direct the AO to estimate the profit rate @ 10% on the above purchases and appeal of the assessee is partly allowed and that of the Revenue is dismissed.
- 2017 (2) TMI 1479 - ITAT JAIPUR
Exemption u/s 11 - application for registration under Section 12AA rejected - HELD THAT:- There is no dispute with regard to the fact that the Ld. CIT has rejected the application on the basis that no activity has been carried out, therefore, genuineness of the same cannot be commented upon. We therefore, following the judgement rendered in the case of CIT vs Vijay Vargiya Vani Charitable Trust [2015 (2) TMI 671 - RAJASTHAN HIGH COURT] set aside of the order the Ld. CIT and restore this application for registration under Section 12AA for decision afresh, to the file of Ld. CIT(E). Grounds raised in the appeal is allowed for statistical purposes.
- 2017 (2) TMI 1474 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - assessee has earned dividend income - HELD THAT:- As decided in [2016 (11) TMI 1681 - ITAT MUMBAI] as claimed by the assessee that no borrowed funds were utilized for earning the exempt income by the assessee and further the dividend were directly credited in the bank account of the assessee and no expenditure was claimed. What it may be, we find that the assessee only received dividend income, therefore, there is no question of disallowance by invoking section 14A r.w. Rule 8D under the facts available on record. Also explained by assessee that on identical fact in earlier years, no disallowance was made. In the present assessment year also, no borrowed funds were invested by the assessee for making investment in shares or for earning dividend income.Disallowance u/s 14A r. w. Rule 8D cannot exceed the exempt income. In view of this fact, we find merit in the claim of the assessee. The appeal of the assessee is therefore, allowed.
- 2017 (2) TMI 1473 - ITAT MUMBAI
Admission of additional evidences by CIT-A - No opportunity of examination, verification and seeking AO’s comments - denial of natural justice - HELD THAT:- Assessee filed large number of additional evidences to support its contentions before the learned CIT(A) for the first time during appellate proceedings - CIT(A) admitted theses additional evidences filed with respect to all the three afore-stated additions made by the AO to the income, wherein all the three afore-stated additions stood deleted by CIT(A) on appreciation on merits of these large number of additional evidences filed by the assessee with learned CIT(A) vide his appellate order dated 31-03- 2015. These large number of additional evidences so submitted by the assessee for the first time during the course of appellate proceedings before the learned CIT(A) were admitte....... + More
- 2017 (2) TMI 1472 - ITAT MUMBAI
Penalty u/s. 271(1)(c) - assessee is a trader in fabrics but on survey u/s.133A it was found engaging only in issuing accommodation sale bills - HELD THAT:- We found that the issues in controversy regarding penalty has been decided in the assessee group case in the case of Smt. Hema R. Gupta and Shri Nilesh Rakesh Kumar Gupta [2016 (11) TMI 448 - ITAT MUMBAI] wherein the similar kind of penalty has been deleted by the tribunal and held this is not a fit case where penalty can be imposed under section 271 (1 )(c) of the Act for concealment of income or for furnishing incorrect particulars of income. We, therefore, set aside the impugned order and allow the grounds of appeal of the assessee. Penalty levied on the alleged unexplained loan - HELD THAT:- As decided in own case [2016 (9) TMI 1243 - ITAT MUMBAI] Assessing Officer has disallowed ....... + More
- 2017 (2) TMI 1471 - ITAT HYDERABAD
TP Adjustment - comparable selection - HELD THAT:- TCS e-Serve Limited - Following the turnover filter as well as taking note of the fact that it owns and possesses brand value and intangibles as compared to the assessee which does not own such assets, we direct that this company be excluded from the list of final comparables. M/s. E-clerx Services Ltd is to be excluded on the ground that it is a KPO. M/s. Infosys Ltd to be excluded on exceptional circumstance and dissimilar functionality and operating in a different business strategy as relying on M/s Hyundai Motors India Engineering P. ltd [2015 (11) TMI 1648 - ITAT HYDERABAD] Disallowance of an amount towards TDS payable on contracts and towards salaries invoking the provisions of Section 43B - HELD THAT:- Disallowance made by the AO is not according to the provisions of law. The TDS i....... + More
- 2017 (2) TMI 1470 - ITAT DELHI
Revision u/s 263 - assessee submitted that a reasonable and proper opportunity of being heard was not provided by the ld. CIT - HELD THAT:- CIT in the body of the impugned order categorically stated that the assessment order passed by the Assistant Commissioner, Circle-2, Meerut appears to have been passed without proper investigation and inquiry from that observation. From the said observation of the ld. CIT, it is clear that he was not sure how and in what manner the assessment order passed was without investigation and inquiry done by the AO, the word “it appears” used by him shows that he was not sure. CIT stated that Sh. Rajiv Jain, CA attended on behalf of the assessee with whom the issues were discussed. Nowhere it is stated that what were the submission of the assessee and why those were not accepted. CIT admitted that....... + More
- 2017 (2) TMI 1469 - ITAT MUMBAI
Disallowance of data processing cost u/s.40(a)(i) - CIT(A) deciding the issue in favour of the assessee - HELD THAT:- Findings of CIT(A) and relying on the decision of the Tribunal in assessee’s own case, we do not find any reason to interfere in the order of CIT(A) for deleting disallowance of data processing cost. Taxability of interest paid to Head Office - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee for the year under consideration has relied on the Order passed by the Tribunal in the assessee’s own case for the Assessment Year 2003-04. Disallowance u/s.14A for earning exempt income - Contention of assessee that no expenditure has been incurred or claimed by the Indian Branch in respect of interest earned by the Head Office (which is not taxable)HELD THAT:- The issue has been decided in assessee&r....... + More
- 2017 (2) TMI 1467 - ITAT MUMBAI
Correct head of income - premium received on account of the tenancy rights - capital gain v/s income from other sources - AO taxed the premium on transfer of tenancy rights as capital gains and also allowed deduction u/s 54EC - LD THAT:- Respectfully, following coordinate Bench decision in assessee’s own case [2016 (5) TMI 1532 - ITAT MUMBAI] and considering the facts of the case, we are of the view that the CIT(A) has rightly directed the AO to assess this receipt of premium as capital gain taxable in the hands of the assessee. Even otherwise, this issue is covered in favour of assessee by the principle of consistency in view of the decision of Radha Soami Satsang [1991 (11) TMI 2 - SUPREME COURT] and Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT]. We find no infirmity in the order of CIT(A) and hence the same is confirmed. The....... + More
- 2017 (2) TMI 1461 - ITAT MUMBAI
Penalty u/s. 271(1)(c) - assessee has suppressed its income by not considering specific provisions of section 50C for computation of capital gains - HELD THAT:- Assessee has furnished the registered sale deed. The assessing officer has made the addition by invoking deeming provisions of section 50C. No case has been made out of any incriminating document etc. being found. In such situation assessee cannot be held guilty of furnishing of inaccurate particulars of income or concealment of income. Further more the conduct of the assessee cannot be held to be contumacious so as to warrant levy of penalty. This proposition is also supported by the decision rendered in the case of Hindustan steel Ltd vs state of Orissa [1969 (8) TMI 31 - SUPREME COURT] - Decided in favour of assessee.
- 2017 (2) TMI 1460 - ITAT BANGALORE
TP Adjustment - comparable selection - Functional similarity - HELD THAT:- Alpha Geo India Ltd. - Since the profile of this company is not similar to the assessee's profile, this company cannot be called a good comparable for determining the ALP. Therefore, we are of the view that this company has to be excluded from the list of comparables on account of functional difference. Celestial Labs Ltd. - Since this company is also functionally different from the assessee company, it can also not be compared as a good comparable. Accordingly, this company has to be excluded from the list of comparables. Vimta Labs Ltd. - This company offers wide spectrum of services and in the absence of proper revenue/segmental break-up, the company should not be considered as a comparable. The bifurcation of revenue is not available and for reference, our ....... + More
- 2017 (2) TMI 1458 - ITAT CHENNAI
Validity of Reopening of assessment u/s 147 - objection raised by the Revenue Audit regarding the allowability of loss on forward contract due to trade in foreign exchange derivatives - independent application of mind or not? - whether recording of the reasons and consequent issuance of notice u/s.148 was on the basis of an independent opinion of the Assessing Officer on the question of law and facts which may have been brought to her notice by the audit party ? - HELD THAT:- There is no other material in the hands of AO to reopen the assessment after concluded the assessment u/s.143(3) of the Act and to issue of notice u/s.148 of the Act on 214.03.2014. It is well settled principle that the AO can form an independent opinion on an issue which may have been brought to his notice by Audit Party and seek to reopen the assessment , provided ....... + More
- 2017 (2) TMI 1456 - ITAT KOLKATA
Subsidy receipt - Addition on receipts of Industrial Promotion Assistance(IPA) - revenue or capital receipts - whether sum received by the assessee as Industrial Promotion Assistance under the West Bengal Incentive Scheme 2000 for establishing the industry in the state of West Bengal which is disbursable by way of sales tax paid is a capital receipt not chargeable to tax? - HELD THAT:- As decided in S M/S. BUDGE BUDGE REFINERIES LTD. [2016 (10) TMI 1307 - ITAT KOLKATA] - Keeping in view the objects of the West Bengal Incentive Scheme 2000 and various judicial precedents relied upon hereinabove, we hold that the subsidy is to be treated as capital receipt not chargeable to tax in the hands of the assessee and not in the years under appeal Sole purpose behind the grant of assistance is to tide over the financial crisis and promotion of indu....... + More
- 2017 (2) TMI 1455 - ITAT BANGALORE
TP Adjustment - adjustment to the transfer price of the Appellant in respect of its IT enabled support services in the nature of back office and customer support services - rejection of comparability analysis of the Appellant in the TP documentation and accepting the comparability analysis performed by the learned TPO in the TP Order - Disregarding application of multiple year/prior year data - HELD THAT:- Order on TP issue is very cryptic and not a speaking and reasoned order. Therefore, We feel it proper to restore the matter regarding TP issue to his file for a fresh decision. We order accordingly. The TP issue is restored back to his file with a direction that he should pass a speaking and reasoned order after affording adequate opportunity of being heard to both sides. Interest income earned from debts - CIT(A) not considering the in....... + More
- 2017 (2) TMI 1452 - ITAT INDORE
Addition on account of interest payments - borrowed funds have been diverted for non business purposes - Whether the assessee had sufficient capital and interest-free funds? - AO found that the assessee has advanced interest bearing funds to some of persons from which either no interest is charged or the same is charged at lesser rate whereas the assessee has paid interest @ 12% on loan taken - HELD THAT:- A.O. has failed to establish that interest free advances to above stated parties were out of interest bearing funds. It is the contention of the assessee that it had sufficient non-interest bearing funds to the tune of ₹ 34.42 crores as per balance sheet as on 31.03.2010 as against interest bearing funds offered at ₹ 10.74 crores. Hence, interest-free funds of ₹ 34.52 crores have been utilised for giving interest-free ....... + More
- 2017 (2) TMI 1449 - ITAT CHENNAI
TP Adjustment - comparable selection - Functional dissimilarity - HELD THAT:- Assessee company is engaged in the manufacture of tube pipes automatic components and tubular products primarily in the auto industry thus companies functionally dissimilar with that of assessee need to be deselected from final list. TPO not considered the Forex loss as non-operative in nature while calculating the operative margin of the company - HELD THAT:- Foreign exchange loss or gain due to reinstatement of balance outstanding at the end of the year cannot be held as operating profit/loss since the same is on account of notional loss to comply with the accounting standards. With regard to the foreign exchange loss incurred in business operations for purchase of materials or for international transaction do not give any extra benefit to the AE who supplies ....... + More
- 2017 (2) TMI 1447 - ITAT CHENNAI
Disallowance on account of replacement of machineries and parts of the machineries - current repairs - HELD THAT:- Assessee admittedly incurred an expenditure in replacement of blow room machinery, carding machinery, draw frame, speed frame and compressor. The Apex court while considering the case of the spinning mill in Saravana Spinning Mills [2007 (8) TMI 16 - SUPREME COURT] found that the machineries in a segment of textile mill has an independent role to play. Therefore, it has to be construed as independent machinery. The question arises for consideration is when there was a replacement of certain machinery in the textile mill, can we say that there was a enduring benefit to the assessee especially when the production activity remains as such. As rightly submitted by the assessee, the production capacity of the spinning mill would a....... + More
- 2017 (2) TMI 1446 - ITAT KOLKATA
TP Adjustment - transfer price determined by the TPO as per Cost Plus Method and in its place applying the Resale Price Method - HELD THAT:- There is merit in the submissions of the assessee that method adopted by the ld. CIT(A) to compute ALP neither falls in CPM Method nor in RPM Method. The Hon'ble Income Tax Appellate Tribunal-Kolkata, in the appeal No. [2008 (4) TMI 340 - ITAT CALCUTTA-A] in the case of the assessee for assessment years 2003-04 & 200405, had concluded that in relation to the engineering drawing and design services rendered by the assessee to its associated enterprise DClL, the DClL should retain the gross margins as determined through the benchmarking exercise. In any event the ld CIT(A) can not apply his own method except the method given in Rule 10B (1) (b) of the I.T. Rules. However, for difference in acco....... + More
- 2017 (2) TMI 1445 - ITAT MUMBAI
Condonation of the delay - inordinate delay of 3389 days - Sufficient cause of delay - HELD THAT:- In this case there has been inordinate delay of about 10 years in filing the appeal. Firstly, the assessee had submitted that it was an inadvertent error. In another affidavit assessee had tried to submit that appeal papers were prepared but were not filed without any reason by the Charted Accountant. The submission is not supported for its veracity or reasoning. Furthermore, there is no rationale in allowing a person to file an appeal after ten years simply because ten years ago also he had thought of filing the appeal. There can be many reasons why a person having thought of filing an appeal may decide not to pursue the matter. Hence the contents of the second submission cannot be treated but as an afterthought. In our considered opinion the delay of 3389 days doesn't deserve to be condoned. Accordingly, we decline to condone the delay.