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Income Tax - Case Laws

Showing 121 to 140 of 802 Records

• 2018 (6) TMI 1671 - ITAT KOLKATA
  

  Addition to 10% of expenditure claimed under the head ‘Growing Charges (Farmer)’ and under the head of Transportation Charge - CIT(A) restricted the addition by admitting fresh evidence in violation of Rule 46A - HELD THAT:- There is a mention of the remand report submitted by the A.O. in the impugned order of the Ld. CIT(A) which shows that a remand report was also sought by the Ld. CIT(A) from the A.O.

  As already noted, the relief allowed by the Ld. CIT(A) to the assessee on both the issues is specifically challenged by the revenue on the ground of violation of Rule 46A which is not there. Moreover, the disallowance made by the A.O. on account of growing charges and other transport charges was highly excessive and unreasonable as found by the Ld. CIT(A) and there is nothing brought on record by the learned DR to rebut or controvert the findings recorded by the Ld. CIT(A) in this regard.

  DR has also not been able to point out as to how the disallowance sustained by the Ld. CIT(A) out of growing charges and other transport charges is not fair and reasonable. The relevant facts and figures as discussed by the CIT(A) in his impugned order show that the disallowance so sustained by him is quite fair and reasonable and there is no justifiable reason to interfere with the same, Therefore, uphold the impugned order of the CIT(A) giving relief to the assessee on both the issues - Decided against revenue

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• 2018 (6) TMI 1669 - ITAT DELHI
  

  Addition u/s 68 - whether the assessee has discharged the onus by proving the identity and creditworthiness of the creditor and the genuineness of the transaction in respect of unsecured loan from Ms. Jasmine Kochar Kapoor - HELD THAT:- Jasmine Kochar Kapoor has a permanent account number in India but has not filed any return of income in India on the ground that she is a non-resident during the year under consideration and therefore, do not have any income chargeable to tax in India. No evidence is filed with regard to her income in the country where she is living. What is her source of income has also not been explained. The bank account of the assessee in India is filed in support of explaining the source of income. However, from where the credit came in this bank account has also not been explained. In the above circumstances, we are of the opinion that the assessee has miserably failed to prove the creditworthiness of the creditor as well as genuineness of the transaction. We, therefore, hold that the assessee could not discharge the onus of proving the cash credit in the name of Ms. Jasmine Kochar Kapoor.

  Quantum of addition - It is stated by the learned counsel that in assessment year 201314, the AO made the addition for unexplained unsecured loan but most of the credit is old credit in the assessee’s books of account and fresh loan during the year under consideration was only to the tune of ₹ 26 lakhs. During the course of hearing before us, he referred to the balance sheet of the last year as well as this year so as to point out that there were huge unsecured loans in last year also.

  So far as the legal proposition is concerned, the addition for cash credit can be made only in respect of fresh credit during the accounting year relevant to the assessment year under consideration. However, what is the actual credit during the year under consideration is a factual thing which requires verification at the end of the AO.Therefore, set aside the issue of addition for unexplained loan to the file of the Assessing Officer and direct him to verify the quantum of fresh credit in the assessee’s books of account during the accounting year relevant to the assessment year under consideration and make the addition only in respect of fresh credit and not in respect of opening balance.

  So far as assessment year 2014-15 is concerned, the learned counsel fairly accepted that the addition made for unexplained cash credit is ₹ 87 lakhs and which is the fresh loan taken from Ms. Jasmine Kochar Kapoor. Therefore, for the assessment year 2014-15, we sustain the orders of the lower authorities on this point and dismiss the assessee’s appeal.

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• 2018 (6) TMI 1668 - ITAT BANGALORE
  

  Short cash found at the time of survey - Survey proceedings u/s.133A - HELD THAT:- We fail to understand the basis of making this addition. In fact, in the absence of any other evidence regarding the user of such cash available as per cash book but not found physically at the time of survey, the same should have been considered as utilized for purchasing goods which was found in excess of book stock and therefore, even in respect of excess book stock, extra income to be declared or added could have been reduced to the extent of short cash found.

  But it is seen that the assessee has declared total amount of excess stock found as additional income. Be that as it may but in our considered opinion, no addition is called for in respect of short cash found at the time of survey in the facts and circumstances of the present case and hence, we delete the same. - Appeal of assessee allowed.

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• 2018 (6) TMI 1667 - BOMBAY HIGH COURT
  

  Appeal of Legal heir of the Assessee - absence of any evidence of legal heirship and/or death Certificate - HELD THAT:- Today Mr. Kotangle, on instructions from Mr. Rajesh Sawant, Income Tax Officer ­23 (3)(3), Mumbai states that if an appeal is filed in physical form i.e. hard copy with the CIT (Appeals) [CIT(A)]­34, Earnest House, Nariman Point, Mumbai, the same would be accepted by the Revenue.

  In the above view, in case the petitioner does files an appeal in the physical form with the office of the CIT(A)­34 at Earnest House, Nariman Point, Mumbai within a period of 2 weeks from today, the same would be entertained by the CIT(A) without taking up plea of limitation.

  The petition is disposed of in the above terms.

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• 2018 (6) TMI 1666 - BOMBAY HIGH COURT
  

  Notice u/s 143(2) not served upon the appellant within the period specified under the proviso to subsection (2) of Section 143 - Tribunal cancelled the assessment order - HELD THAT:- Commissioner of Income Tax (Appeals) records the fact that besides the return of income indicating the new address, the appellant had by earlier letter dated 6th December, 2005 intimated the change of its address to the Assessing Officer and also requested a issue of fresh PAN. Besides, the Assessing Officer had in fact served at the new address, the assessment order under Section 143(3) of the Act on 30th November, 2006 in respect of Assessment Year 2004-05.

  This was much prior to the statutory notice issued on 5th October, 2007 and 25th July, 2008 at the address of the respondent as recorded in the PAN. The respondent had taken up the objection with regard to non-service of notice during the assessment proceedings. Thus, as rightly held by the impugned order of the Tribunal that, in view of the proviso to Section 292(BB) of the Act, the notice not being served within time, cannot be deemed to be valid. Therefore, no fault can be found with the impugned order of the Tribunal.

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• 2018 (6) TMI 1663 - ITAT MUMBAI
  

  Rectification of mistake - HELD THAT:- There is no dispute that the assessee did carry a sum of ₹ 484,22,01,385/- to reserve from 1.4.1997 till 31.3.2003‖. We found that it is an apparent mistake in so far as the said sum was in fact carried to reserve from FY 1989-90 and not from 1.4.1997. Accordingly we correct the same.

  In Para 16 of order dated 09/10/2015, reference has been made to sub-section 4A inserted in s 41 "by the Finance Act 1997. It has however been inadvertently stated that this sub section was inserted with from 1.4.2008. The correct year is however 1998 and not 2008. Since it is an apparent mistake, we rectify the same.

  Issue whether, balance in ‘Profit & Loss Account‘ which is not in the nature of any other reserve having specific objectives‘, should form part of ‘general reserves‘ has not been specifically adjudicated by the Tribunal. As it is a mistake apparent from record, we recall the order to a limited extent of deciding whether balance in Profit and Loss Account which is not in the nature of ―any other reserve having specific objectives‖, should form part of general reserves‘. We direct according

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• 2018 (6) TMI 1662 - ITAT CUTTACK
  

  Disallowance under Peripheral Development Expenses - allowable deduction u/s.37 - AO observed that the peripheral development claimed by the assessee are not incurred wholly and exclusively incurred for the business purpose - HELD THAT:- The expenditure claimed by the assessee has been incurred wholly and exclusively for business purposes as envisaged by the assessee however, the AO has to verify the claim as to whether the peripheral expenditure in the corporate office is for the particular area of the employees or as a whole. Accordingly, we respectfully following judicial precedence and the order of the Tribunal and we restore this issue to the file of AO to verify the nature of expenditure incurred on the peripheral areas and decide the same on merits. This ground of appeal is allowed for statistical purposes.

  Disallowance of interest on disputed Govt. duty (Electricity duty and water charges) - HELD THAT:- As decided in own case [2012 (12) TMI 632 - ITAT CUTTACK] direct the AO to allow the claim of the assessee on account of interest on disputed Govt. duty (Electricity duty and water charges) and this ground of assessee is allowed

  Disallowance of additional depreciation u/s.32(1)(iia) - HELD THAT:- We find the issue is similar to the . [2018 (4) TMI 1754 - ITAT CUTTACK ] present facts and circumstances of the case, and we respectfully follow the above judicial precedence of this bench of the Tribunal and remit the matter to the file of AO for reconsideration of claim of additional depreciation u/s.32(1)(iia) of the Act. Accordingly, we allow this ground of assessee for statistical purposes.

  Disallowance u/s.14A - HELD THAT:- In various decisions, we find that the Tribunal has restored the disputed issue to the file of AO for re-examination and reverification and apply the provisions of Section 14A r.w.rule 8D and in the instant case, the issue being similar, we find that the AO has not complied with the mandatory requirement of Section 14A (2) of the Act read with Rule 8D (1) (a) of the Rules and we respectfully follow the above judicial decision of the Tribunal and remit the disputed issue to the file of AO for re-examination and verification and to decide the issue on merits after complying the mandatory requirement of the provisions of Section 14A of the Act and this ground of appeal is allowed for statistical purposes.

  Treatment of short term and long term capital gain - AO has treated the short-term and long-term capital gain earned by the assessee as business income of the assessee - HELD THAT:- We agree with the ratio of judicial decision applicability to the present case and we direct the AO to treat the income under the capital gains and not as business income and allow this ground of appeal of the assessee.

  Non-deduction of credit amount under provision for leave encashment disallowed in the past assessment years u/s.43B(f) - AO made disallowance on account of provision for leave encashment u/s 43B(f) of the Act, on the ground that the same is allowable only if the said expenditure has actually been paid by the assessee - HELD THAT:- As relying on its earlier order has restored the disputed issue to the file of AO

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• 2018 (6) TMI 1660 - KARNATAKA HIGH COURT
  

  Denial of natural justice - Joint Commissioner while granting an approval u/s.153D to an order passed u/s.153A gave no opportunity to be provided to the Appellant - HELD THAT:- As in the case of 'Gopal. V. Pandit [2018 (7) TMI 51 - KARNATAKA HIGH COURT] in which as regards first question, we have held that in the absence of specific provision in Section 153D of the Income Tax Act, 1961 the present Authority, namely, Joint Commissioner is not expected to give an opportunity of hearing to the Assessee before giving an approval to the Draft Assessment Order to be passed by the lower Authority, namely, Deputy Commissioner.

  Seized material corroborates the income fixed under the head “Pooja”- Whether seized material does not disclose such income from “Pooja” ?- HELD THAT:- We have held that the same does not give rise to any substantial question of law as it is a matter of estimate based on the relevant material seized during the course of search and the statement recorded of the Assessee u/s. 132[4] of the Act as to what was the income of the Assessee who was working as Priest during the relevant period.

  Unexplained expenditure - HELD THAT:- Margins are not recorded in the books of accounts therefore those were considered by the Assessing Officer as payment out of books. As it is apparent from these numbers written in the margin that a proper care was taken for distinguishing the amounts in thousands by putting a point [.] before the number as in the case of last number written as 0.5. Therefore the other numbers written in the margin with the dates clearly indicates the payment made by the assessee in lakhs. Therefore we do not find any error or illegality in the orders of the authorities below on this issue and confirm the addition

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• 2018 (6) TMI 1659 - ITAT DELHI
  

  Salary paid to overseas expatriates of the assessee working in India by the Head Office - Disallowance of salary paid overseas to expatriates of the Appellant working in India by the Head Office (HO) and the Indian taxes paid thereon by the HO - Indian Permanent Establishment (‘PE’) from its HO/ overseas branches - HELD THAT:- Similar issue has already been adjudicated in assessee’s own case for the assessment year 2007-08 [2014 (10) TMI 150 - ITAT DELHI] the expatriates were working in India and salary had been subjected to tax for which form no. 16 was also issued to the expatriates - there cannot be any dispute regarding verifiability of these expenses -The expenses had been incurred wholly and exclusively for the Indian branch and no part of thee expenses could be allocated to any other branch by head office - there was no dispute amongst the members in regard to non-applicability of provisions u/s 44C - Decided in favour of assessee.

  Addition on account of interest accrued/received by the Indian PE on the funds lying with the HO/other overseas branches - HELD THAT:- As decided in own case authorities below we are not justified in taxing the interest received by the Indian PE / branches of the assessee from its head office / other overseas branches as no person can make profit out of its self. The Assessing Officer is, therefore, directed to delete the addition in question. Decided in favour of the assessee.

  Addition on account of interest received on External Commercial Borrowings given to the Indian Borrowers - HELD THAT:- As decided in own case In the present case, the Assessing Officer himself had admitted by grossing up the ECB interest by the amount of tax borne by the borrowers that tax at source has been deducted. We are thus of the view that no interest under section 234B of the Act can be levied for the tax demand on account of ECB interest and interest under section 234B is also not chargeable sicne ECB interest received by the assessee from the borrowers was subject to tax deduction at source under section 195 of the Act. The Assessing Officer is thus directed to delete the addition made on account of interest received from ECB given to Indian borrowers.

  Taxability of interest u/s 244A on the income tax refund - HELD THAT:- Restoring the issue to the Assessing officer to determine / adopt the rate of tax on refund in the light of the relevant clauses of IndoFrance DTAA and the decision of Special Bench in Clough Engineering [2011 (5) TMI 562 - ITAT, DELHI]

  Transfer pricing adjustment - main grievance of the assessee in these grounds is that the ld. DRP/AO/TPO used the erroneous comparable uncontrolled price (CUP) data obtained by issuing the notices u/s 133(6) of the Act but without providing any opportunity to the assessee, while determining the arm’s length price of the international transaction - HELD THAT:- AO/TPO collected comparable uncontrolled price (CUP) data by issuing the notices u/s 133(6) of the Act and used the said data for the purpose of determining the ALP of the international transactions entered into by the assessee with its AE. It is well settled that nobody should be condemned unheard. In the present case, it is alleged that the AO/TPO did not confront the assessee with the data obtained by issuing the notices u/s 133(6) of the Act while determining the arm’s length price. We, therefore, deem it appropriate to set aside this issue back to the file of the AO/TPO to be decided afresh after confronting the data obtained by issuing the notices u/s 133(6) of the Act to the assessee

  Applicability of the tax rate at 40% plus surcharge and educational cess - HELD THAT:- Tribunal while referring Explanation (1) to section 90(2) has rejected the contention of the assessee that the applicable rate of tax on the income of the assessee attributable to its PE in India cannot exceed the applicable rate of tax in the case of domestic companies. In the said Explanation (1) to section 90(2) it has been declared that the charge of tax in respect of foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company. Thus the grievance of the assessee that the authorities below have not adjudicate the issue under the provisions of Article 24 of DTAA does not stand. - Decided against the assessee.

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• 2018 (6) TMI 1658 - ITAT AHMEDABAD
  

  Order of CIT-A u/s.250(6) - whether the order passed by the CIT(A) in treating the balancing figure at the time of amalgamation as goodwill and allowing the depreciation on the same is sustainable in the eye of law? - HELD THAT:- We have perused relevant materials on record. We have also gone through the judgement of the Hon’ble Gujarat High Court wherein the issue has been decided in favour of assessee in assessee’s own case for AYs 2010-11, 2011-12 & 2012-13. The Hon’ble Gujarat High Court while dismissing the appeal preferred by the Revenue and upheld grant of depreciation on goodwill - decided against revenue.

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• 2018 (6) TMI 1657 - ITAT AMRITSAR
  

  Exemption u/s 11 - not granting registration u/s 12AA - charitable activity u/s 2(15) - assessee society is at nascent stage - HELD THAT:- Where the assessee society is a nascent stage then it cannot be expected that the society must do some charitable work for grant of registration u/s 12AA

  Construction of Hospital will be for charitable purposes and for needy and deprived public at large. Further from reply No.2 it reflects that the Hospital running will be charitable and will be a medical relief for the needy and the public which cannot afford the costly medical facility in present day . The hospital will be charitable and not for commercial gains. However from the amended aims and objects and rules and regulations of the society it does not reflect that the hospital will be charitable and not for commercial gains. On specific query raised by the Bench, which was acceded by the Assessee/Applicant Society that the assessee society shall get incorporate the condition that the Hospital will be charitable only and not for commercial gains, in the aims and object/ MOU of society.

  We endorse the assent of the Ld. A.R.

  Set aside the order passed by the Ld. CIT(E) and feel it appropriate to remand the case in hand to the file of the ld. CIT(E) for deciding afresh while taking into consideration the facts, circumstances and documents inter-alia, the amended MOA whereby the aims and objects have already been amended and further incorporation of condition in the aims and objects of society to the effect that the Hospital will be charitable only and not for commercial gains. - Appeal filed by the assessee society is allowed for statistical purposes.

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• 2018 (6) TMI 1656 - ITAT MUMBAI
  

  Cancelling the registration already grated u/s 12AA(3) - charitable activity u/s 2(15) - main activities of the assessee’s trust are providing swimming pool facilities for aquatic events and training facilities for other sports like squash, billiards, table tennis, etc. - HELD THAT:- There is no change in activity of the assessee’s trust, what was in prior assessment years, and hence, the registration of assessee’s trust cannot be disputed merely because the proviso to section 2(15) of the Act has come into play. The effect of section 11 can be considered while framing assessment but registration has to be granted. The issue is squarely covered by Hon’ble Bombay High Court decision in the case of Khar Gymkhana [2016 (6) TMI 489 - BOMBAY HIGH COURT] respectfully following the same, we direct the DIT(Exemption) to grant registration. - Decided in favour of assessee.

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• 2018 (6) TMI 1655 - ITAT DELHI
  

  Reopening of assessment u/s 147 - unexplained deposit under section 69A - HELD THAT:- A.O. merely noted in the reasons that since there is an information available on ITD System of the Department that assessee has made cash deposits of ₹ 14,75,000/- in his Bank Account, therefore, income chargeable to tax has escaped assessment.

  Deposit in the bank account per se cannot be the income of the assessee. This is a mere suspicion of the A.O. based on incorrect fact that income chargeable to tax has escaped assessment and accordingly, quashed the reopening of the assessment. See TAJENDRA KUMAR GHAI C/O M/S. RRA TAXINDIA VERSUS ITO – 1 (5) RUDRAPUR [2017 (6) TMI 491 - ITAT DELHI] - Appeal of the assessee is allowed.

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• 2018 (6) TMI 1651 - ITAT MUMBAI
  

  Determining the LTCG as per the deeming provisions of Sec. 50C - as per assessee ‘reserve price’ of the property was to be taken as that which was applicable on 27.08.2009 i.e the date on which the ‘agreement to sell’ was executed - HELD THAT:- As is discernible from the records, the requisite conditions envisaged in the provisos to Sec. 50C appears to have been satisfied by the assessee viz. (i). that, the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the property are not the same; and (ii). that, part of the sale consideration as claimed by the assessee was received by the assessee by way of account payee cheques, on and before the date of the agreement for transfer. However, at the same time, we also cannot remain oblivious of the fact that the ‘agreement to sell’, dated 27.08.2009 was never filed by the assessee in the course of the proceedings before the lower authorities, and was in fact furnished for the very first time before us. Matter requires to be restored to the file of the A.O, who shall remain at a liberty to verify the veracity of the ‘agreement to sell’, dated 27.08.2009, as well as the claim raised by the assessee on the basis of the same to bring its case within the realm of the provisos to Sec. 50C. In case, the A.O is satisfied with the genuineness of the ‘agreement to sell’, and the claim raised by the assessee on the basis of the same are found to be in order, then, he shall redetermine the LTCG in the hands of the assessee u/s 50C in terms of our aforesaid observations.

  Entitlement for claim of deduction under Sec. 54F in respect of an investment that was made by him towards purchase of a property, vide a registered agreement dated 10.07.2013 - HELD THAT:- The said claim was never raised by the assessee before the lower authorities. The assessee in support of his aforesaid entitlement towards deduction under Sec.54F had placed on record the copy of the ‘purchase deed’, dated 10.07.2013. Admittedly, an A.O in the backdrop of the judgment of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT [2006 (3) TMI 75 - SUPREME COURT] is not vested with any powers to entertain a claim for deduction/relief raised by the assessee, except for those raised either in his original return of income or through a revised return. However, we are of the considered view that as observed by the Hon’ble High Court of Bombay in the case of CIT Vs. Pruthvi Broker and Share Holders Ltd [2012 (7) TMI 158 - BOMBAY HIGH COURT] no such restriction is placed on the appellate authorities for entertaining an additional claim of the assessee. Accordingly, we restore the matter to the file of the A.O, with a direction to him to consider the said claim of the assessee in the course of the ‘set aside’ proceedings. Needless to say, the A.O shall in the course of the ‘set aside’ proceedings afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate his aforesaid claim of deduction on the basis of supporting documentary evidence.

  Not allowing deduction of the ‘cost of acquisition’ of the property while computing the LTCG on the sale of the property under consideration - HELD THAT:- We find ourselves to be in agreement with the said contention. Admittedly, the assessee had failed to place on record the copy of the ‘purchase deed’ which would had supported the ‘cost of acquisition’ of the property under consideration. It is the claim of the assessee that the property under consideration was an ancestral property that was acquired by him alongwith the other four co-owners prior to 01.04.1981. Accordingly, the assessee has before us relied on a ‘Valuation report’ of a government approved valuer, as per which the ‘Fair Market Value’ of the property under consideration on 01.04.1981 u/s 55(2)(b)(ii) is stated to be ₹ 1,68,807/-. As the said ‘valuation report’, dated 18.02.2018 was not filed with the A.O in the course of the assessment proceedings, therefore, we restore the issue as regards determination of the ‘cost of acquisition’ of the property to his file. The A.O shall in the course of the ‘set aside’ proceedings remain at a liberty to verify the ‘cost of acquisition’ of the property under consideration - Assessee shall be afforded a reasonable opportunity of being heard and therein substantiate his aforesaid claim in the course of the ‘set aside’ proceedings. - Appeal of the assessee is allowed for statistical purposes

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• 2018 (6) TMI 1648 - KARNATAKA HIGH COURT
  

  Deduction allowable u/s 10A - reducing the total turnover also by the same amount by which export turnover was reduced by the Assessing Officer in respect of foreign currency expenses incurred towards technical services rendered outside India - HELD THAT:- First purported substantial question of law raised by the Revenue is concerned, the same is covered by the Division Bench decision of this court in the case of Tata Elxsi Ltd. v. Asst. CIT [2015 (10) TMI 634 - KARNATAKA HIGH COURT] which has been affirmed by the hon'ble Supreme Court in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT].

  Excluding the comparables, namely, M/s. Infosys Technologies Ltd., Kals Information Systems Ltd., Tata Elxsi Ltd., Persistent Systems Ltd. on the ground of functional dissimilarity - HELD THAT:- Companies functionally dissimilar with that of assessee as provider of software services need to deselected from final list.

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• 2018 (6) TMI 1647 - ITAT AHMEDABAD
  

  Penalty u/s. 271(1)(c) - deemed dividend addition u/s 2(22)(e) - HELD THAT:- As decided in SHRI DIPESH L. SHAH [2017 (4) TMI 1458 - ITAT AHMEDABAD] Section 2(22)(e) of the Act creates legal fiction whereby loans/advances received by an assessee are deemed as taxable income in the hands of the recipient assessee in certain circumstances as specified therein. In view of section 2(22)(e) of the Act, loans/advances amount under consideration artificially partake the character of dividend and brought to tax as deemed dividend.

  The aforesaid provision of section 2(22)(e) has brought a deeming and unnatural concept of treating the returnable loans/advances as taxable income in the hands of borrower in departure with the operation of the normal provisions. Admittedly, the relevant facts concerning the issue were available to the AO. Thus, there is no concealment of any ‘particulars’ of any fact per se.

  Assessee has simultaneously claimed that the aforesaid advances have been received the course of ordinary business and owing to ongoing business transactions and thus not susceptible to provisions of section 2(22)(e) - while the provisions of s.2(22)(e) have been applied, the issue is not entirely free of any debate. As noted, section 2(22)(e) of the Act is only deeming provision of law and is not a substantive provision. Thus, in the absence of any perceptible mala fides, we find no infirmity in the order of the CIT(A) deleting the penalty imposed by the AO. Thus, we do not see any merits in the appeals of the Revenue.

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• 2018 (6) TMI 1646 - ITAT CHANDIGARH
  

  TDS u/s 194J - roaming charges paid for roaming agreements with OTOs - assessee is engaged in the business of providing telecommunication services in telecom circles of Punjab - HELD THAT:- We find that departmental appeals are without any merit. The facts taken on record which have not been upset are that for installation/setting up/repairing/servicing/maintenance/capacity augmentation etc. human intervention is required, however after this process is complete, the interconnection between the operators is automatic and at that stage, no human intervention is required.

  These conclusions have been arrived after considering the Reports of the technical experts, their cross-examination etc. Interconnecting User Charges (IUC) which signifies charges for connecting two entities. The Coordinate Benches have relied upon the order in the case of i-Gate Computer Systems Ltd where decision of M/s Bharti Cellulars Ltd. [2010 (8) TMI 332 - SUPREME COURT] has been considered and also on the decision of Data Link transfer wherein considering similar facts, it has been held that it does not require any human intervention and charges received or paid on account of this is not fees for technical services as envisaged in section 194J read with section 9(1) (vii) read with Explanation-2 of the Act.

  In the absence of any change in facts or law, the payments made for interconnection are not fees for rendering any technical services as envisaged in section 194J of the Act. Therefore, no tax is deductible at source u/s 194J of the Act on payment of roaming charges to the OTOs and the assessee therefore cannot be treated as an assessee in default. Apart from the various decisions of High Courts and ITAT orders cited, the issue stands concluded in favour of the assessee by the consistent orders of ITAT Bangalore and Jaipur Benches in assessee's own case. In the absence of any distinction on facts, circumstances or position of law, the departmental appeals are dismissed.

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• 2018 (6) TMI 1645 - ITAT AHMEDABAD
  

  Ex-parte order of CIT-A - HELD THAT:- As noticed in the CIT(A)’s order, notice was served through Chartered Accountant but then, as is the contention of the assessee, the Chartered Accountant did not deal with the matter in intelligent manner and had therefore eventually disengaged by the assessee. We have also been assured by the assessee that given another opportunity of presenting his case before the learned CIT(A) he will scrupulously ensure early disposal of the appeal on merits and shall not resort to any dilatory tactics.

  DR also does not oppose the matter being remitted to the file of the learned CIT(A) for fresh adjudication. In view of the above discussion and bearing in mind entirety of the case, we deem it fit and proper to remit the matter to the file of learned CIT(A) for fresh adjudication on merits. Appeal is allowed for statistical purposes.

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• 2018 (6) TMI 1644 - ITAT AHMEDABAD
  

  Ex parte order of CIT(A) - CIT(A) confirmed the order of AO without deciding the same on merit. - Disallowance of interest on interest free advance - HELD THAT:- The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given an opportunity to defend himself. This principle is the sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross-examination, right to legal representation, the disclosure of evidence to the party, report of inquiry to be shown to the other party and reasoned decisions or speaking orders.

  We took this guidance for the right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India [1978 (1) TMI 161 - SUPREME COURT] wherein laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of the norm of the rule of audi alteram partem. We find that in this instant case, the assessee was not given a proper hearing. Therefore, we are of the view that the assessee must be given one more opportunity of hearing and to represent his case.

  We also note that the assessee claimed not to have filed the copy of confirmation in respect of the loan obtained during the year before the AO at the time of assessment proceedings.

  Therefore, in exercise of the power conferred under Rule 28 of Tribunal Rules, we restore this appeal to the file of AO for reconsideration all grounds of appeal after allowing the proper opportunity of being heard by law. We are sending this appeal to the AO for fresh adjudication to avoid the multiplicity of the appeal. Nevertheless, to mention that the assessee will cooperate in the appeal proceedings and his failure will entail confirmation of the impugned addition made by the AO. The assessee will file necessary evidence on which he wants to rely upon at the time of the hearing. This ground of assessee’s appeal stands allowed for statistical purpose.

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• 2018 (6) TMI 1643 - ITAT JAIPUR
  

  Rectification u/s 254 - capital gain computation - cost of acquisition in case of succession of the firm to the company - HELD THAT:- Section 49(1)(iii)(e) was introduced by the Finance Act, 2012 with effect from 1.4.1999. The said section, in our view, is only clarificatory in nature and has specifically provided the cost of acquisition in case of succession of firm to the company. However, the said cost of acquisition was already in existence under section 49(1)(iii)(a). Therefore, in our view no fresh charge has been created on account of succession of a firm to the company. It has only clarified the existing basis of calculating the cost of acquisition in case of succession of the firm to the company.

  We find that the above findings of the Coordinate Bench have been rendered in the context of the provisions of section 49(1)(iii)(a) and not section 49(1)(iii)(e) as amended by the Finance Act, 2012 where clause (xiii) of section 47 was inserted w.r.e.f 1.4.1999. Further, the contentions of the assessee have also been understood in context of transfer as per clause (xiii) of section 47 as evident from the finding that “the assessee, in our view, has wrongly got confused with the principles laid down under section 47 which talks about the transaction which are not regarded as transfer, with that of principles for determining of cost of acquisition under section 49” instead of corresponding clause relating to cost of acquisition relating to transfer as contemplated under section 47(xiii) as introduced in section 49(1)(iii)(e)

  However, if we look at the first two grounds of appeal, these grounds of appeal were raised by the assessee specifically in the context of section 49(1)(iii)(e) as amended by the Finance Act, 2012 which were brought on the statute subsequent to passing of the assessment order u/s 143(3) of the Act and which were invoked by the ld CIT(A). In these grounds of appeal, the assessee has challenged the findings of the ld CIT(A) in holding that amendment to section 49(1)(iii)(e) inserting clause (xiii) of section 47 was clarificatory in nature.

  The said findings of the ld CIT(A), as we have noted above, were rendered in the context of amendment being retrospective and hence clarificatory in nature. However, the way the same has been apparently understood by the Coordinate Bench was that the provisions governing cost of acquisition in case of succession, inheritance are already in existence under section 49(1)(iii)(a), the subsequent amendment in section 49(1)(iii)(e), wherein corresponding provisions governing cost of acquisition in case of a transfer as defined in section 47(xiii) were provided by the Finance Act, 2012, was clarificatory in nature.

  We further note that contentions of the assessee regarding non-levy of interest u/s 234B due to retrospective amendment, though noted by the Coordinate Bench, has apparently missed its attention and the ground of appeal has been dismissed holding it as consequential in nature in view of deletion of ground relating to cost of acquisition.

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