|
Advanced Search Options
Income Tax - Case Laws
Showing 81 to 100 of 806 Records
-
2021 (9) TMI 1393 - ITAT HYDERABAD
Corporate guarantee adjustment @2% commission rate - AR contention before us is that the assessee has not derived any income since the corresponding corporate guarantee’s object was to help the overseas associated enterprise ‘AE’ which nowhere yielded any returns thereupon - HELD THAT:- We express our inability to accept the assessee’s instant former substantive grievance. We make it clear that we are dealing with Chapter-X of the Act which is in the nature of a “Special Provision” not dependent upon actually derived income component; whatsoever.
Coupled with this, hon'ble Madras high court’s decision PCIT Vs. M/s.Redington (India) Ltd., [2020 (12) TMI 516 - MADRAS HIGH COURT] holds that a corporate guarantee to be an international transaction u/s.92B, Explanation-(c) with retrospective effect from 01-04-2001. We thus, affirm the impugned corporate guarantee adjustment in principle.
Quantification of the impugned guarantee - We affirm the impugned adjustment @0.875% as against the assessee’s stand that the same ought to be taken as 0.5% only. We therefore partly accept both the learned representatives’ arguments against and in favour @2% commission in issue to this limited extent. The assessee’s instant former substantive ground succeeds in above terms.
ALP adjustment pertaining to interest on receivables emanating from the order of TPO’s and DRP’s directions going by interest rate @7.5% as per SBI domestic term deposits returns - As we need not delve much deeper qua the relevant facts pertaining to the instant issue. We find that assuming but not accepting that the ld.lower authorities have rightly found the assessee’s interest receivables as beyond the period involving uncontrolled transactions, the impugned adjustment is not liable to be sustained for the sole reason that the same has not only been made as per ‘LIBOR’ rate applicable in case of international transactions after taking State Bank of India’s term deposit(s) rate only but also no comparable to this effect in the very segment has been found so as to form the necessary benchmarking in uncontrolled circumstances. The impugned ALP adjustment is directed to be deleted therefore.
-
2021 (9) TMI 1387 - ITAT AHMEDABAD
Unaccounted income of the assessee - reliance on statement furnished u/s 131 - AO held that the retraction of the statement cannot be relied upon and thus treated the sum as unaccounted income of the assessee by adding to the total income - HELD THAT:- Admittedly, the income as discussed was based on the statement furnished by the assessee u/s 131 - It was submitted in the statement furnished under section 131 of the Act that the assessee along with 3 other persons has entered into a land transaction deal and earned an income of Rs. 3 crores by way of commission. There was no discussion about any piece of evidence/document found during the search proceedings under section 132 of the Act at the premises of the assessee suggesting that the assessee has earned commission income. We note that the CBDT by way of instruction bearing number F.No. 286/98/2013-IT(Inv.III) dated 18th December 2014 has discouraged its officers to make any addition based on the statement obtained during survey/search proceedings until and unless it is corroborated by the documentary evidence.
We also note that the Hon’ble Courts in numerous cases held that there cannot be any addition merely on the basis of the statement furnished during survey/search proceedings.
However, the facts of the case on hand is peculiar in the sense that the assessee himself in the retraction affidavit has admitted to have entered into the land transaction deal along with other persons. But in the affidavit it was claimed that he has earned along with other persons only a sum of ₹18 Lacs only out of the impugned land transaction deals.
In our considered view, the affidavit discussed above is a vital piece of evidence wherein the assessee himself has admitted to have earned commission income. In the affidavit it was furnished that the area of the land in dispute was 33,881 square yard which matches with the registry documents of the properties in dispute as evident from the finding of the authorities below. Accordingly, there remains no dispute to the fact that the assessee has earned commission income out of the land transaction deal as discussed above.
Quantum of commission earned by the assessee along with the other parties - We note that the statement furnished by the assessee by way of retracted affidavit has to be admitted either in full or it should be rejected in full. As such it cannot be admitted in piece meal basis especially in a fact and circumstances where no other material available on record except admission of the assessee in such affidavit. Likewise, there was no inquiry conducted by the authorities below from the concerned parties despite having the necessary details on record. Furthermore, there is no yardstick to take the rate of commission at 3% on the value of the land sold. It was the range of the rate i.e. 1 to 3% suggested by the assessee to indicate the prevailing rate which purely depends upon the facts and circumstances. Thus the same cannot be taken on presumption basis to determine the commission income. Thus, in such facts and circumstances, we hold that the amount of commission in impugned transaction stands at Rs. 18 lacs only.
Share of assessee in impugned commission - We note that the learned CIT (A) has given categorical finding that the assessee has sold the land in dispute along with 3 other parties and therefore the share of the assessee stands only at 25% of the commission income. In this regard, we note that the assessee before the learned CIT (A) has furnished the PAN along with addresses of all the other 3 parties. Therefore in view of above discussed facts, there remains no ambiguity to the fact that the assessee’s share is only of 1/4th i.e. 25% of entire amount of commission of Rs. 18 lacs. Thus assessee share will be of Rs. 4.5 lacs only.
Whether the impugned amount has already been to tax in the income offered by the assessee based on the diary found during the search? - The assessee in affidavit and before CIT (A) submitted that whatever commission received on impugned land transaction was recorded in diary. We are also conscious to the fact that out of 3 land transaction one was executed in the A.Y. 2010-11 and other two were executed in the year under consideration i.e. A.Y. 2011-12. Moreover, the assessee in the year under consideration has offered peak amount of Rs. 16,50,000/- to tax. This fact has not been disputed by the revenue in its appeal. Thus we hold that amount of commission has already been offered by the assessee in the amount of income offered to tax on peak credit theory basis. Moreover, the Revenue has not brought anything on record establishing that the impugned was not part and parcel of the seized document. Hence, no further addition is required to be made. In view of the above we dismiss the ground of appeal raised by the Revenue whereas assessee’s ground in CO is allowed.
Unaccounted commission - Admittedly, the amount in dispute was very much appearing in the diary seized during the search proceedings. The income based on seized diary has already been offered to tax by the assessee considering the peak amount. The peak credit theory was applied for the reason that there were many entries reflecting the receipt of cash as well as the payment of cash. The impugned amount of commission was also very much appearing as cash receipt in the impugned diary. It was also contended by the assessee that his share in the impugned land transaction deals stands at ₹8.75 Lacs and 11 Lacs only. This contention of the assessee was nowhere doubted by the authorities below which is also appearing in question No. 27 to 34 of the statement furnished under section 131.
Since the impugned amount of commission has already been considered by the AO in the working of peak balance based on the diary seized, therefore there cannot be any separate addition to the total income of the assessee. If it is done so, it would lead to the double addition which is unwarranted under the provisions of law. Hence the ground of appeal of the revenue is dismissed.
-
2021 (9) TMI 1384 - ITAT MUMBAI
Estimation of income - Addition of bogus purchases - HELD THAT:- When the sales have been accepted as genuine the entire purchases cannot be treated as non-genuine - In the case of Bholanath Polyfab Pvt. Ltd. [2013 (10) TMI 933 - GUJARAT HIGH COURT] held that when the assessee made purchases and sold the finished goods as a natural corollary not the entire amount covered under such purchases would be subject to tax but only the profit element embedded therein.
Similar view has been taken in the case of CIT v. Simit P. Seth[2013 (10) TMI 1028 - GUJARAT HIGH COURT]. Simply because the parties were not produced the entire purchases cannot be added as held in the case of CIT v. Nikunj Eximp [2013 (1) TMI 88 - BOMBAY HIGH COURT] - However, at the same time keeping in view the nature of business of the assessee and the fact that the assessee is making some local purchases without any transportation bills, lorry receipts etc, the possibility of making purchases in gray market on cash cannot be ruled out - we direct the Assessing Officer to restrict the disallowance/addition to 12.5% of the non-genuine purchases
Allocate the R & D expenditure among 80IB and 80IC units and non 80IB and 80IC units - Allocating/sustaining allocation of Research & Development Expenses incurred by the appellant amongst the different manufacturing unit of the appellant - HELD THAT:- We observe that when the details of products manufactured by the units and products on which R & D is undertaking by the assessee were placed on record before the Assessing Officer to show that they are completely independent from each other, the Assessing Officer completely failed to bring on record that R & D expenditure in fact benefited the existing units and thereby it is necessary to allocate the R & D expenditure among 80IB and 80IC units and non 80IB and 80IC units on the basis of percentage of sales on respective units to the total sales. We further observe that even after allocation of expenses among 80IB eligible and non-eligible units the taxable income from the assessment under consideration remained the same as the tax was assessed under book profits u/s. 115JB of the Act and not under normal provisions of the Act.
Almost identical issue has come up in the case of Zandu Pharmaceuticals Works Ltd., v. CIT [2012 (9) TMI 620 - BOMBAY HIGH COURT] wherein the Hon'ble Bombay High Court held that unless expenditure incurred on research and development work relates to units eligible for deduction under section 80-IA, same cannot be apportioned to the said units.
Thus we hold that the allocation of R & D expenditure by the Assessing Officer among 80IB and 80IC units and non 80IB and 80IC units on the basis of percentage of sales of respective units to the total sales is baseless and totally unwarranted. Thus, we direct the Assessing Officer to recompute the income under normal provisions of the Act without any allocation of R & D expenditure among 80IB/80-IC and non 80IB/80IC units.
-
2021 (9) TMI 1379 - ITAT BANGALORE
TP Adjustment - exclusion of comparable companies in the SWD services - HELD THAT:- Acropetal Technologies Ltd should be excluded from the list of comparable companies in the case of companies engaged in rendering SWD services such as the Assessee. We therefore direct exclusion of this company from the list of comparable companies.
Exclusion of E-Infochips Ltd. ought to be excluded from list of comparable companies in the case of companies rendering SWD services similar to that of the Assessee.
ICRA Techno Analytics Ltd. is engaged in diversified activities of software development and consultancy, licensing and sublicensing, annual maintenance for software support, web development & hosting and revenue from all the activities are reported under one segment, without any segmental information regarding the same made available. Therefore, in the absence of segmental information, it cannot be ascertained whether the company passes all the filters applied by the TPO and therefore ought to stand excluded from the final list of comparables.
E-Zest Solution Ltd. is concerned, this company was directed to be excluded by this Tribunal in the case of a SWD service provider such as the Assessee as functionally not comparable and absence of segmental information of its products and software development segments and also in the light of presence of inventory showing that this company is a product company.
As far as exclusion of Persistent Systems and Solutions Ltd., is concerned, we find that this company was again excluded in the decision in the case of Autodesk India Pvt. Ltd. [2018 (12) TMI 1742 - ITAT BANGALORE] for the very same reasons for exclusion of e-Zest solutions Ltd. We therefore direct exclusion of this company from the list of comparable companies.
Computation of deduction u/s 10A - exclusion of telecommunication expenses and expenses incurred in foreign currency for rending technical services outside India, both from the export turnover and total turnover - HELD THAT:- It is not in dispute before us that the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that charges/expenses relating to telecommunication, and expenses in connection with rendering technical services outside India, should be excluded both from export turnover and total turnover while computing deduction u/s.10A of the Act i.e., whatever is removed from the numerator should also be excluded from the denominator while working total turnover and export turnover for allowing deduction u/s.10A.
The aforesaid decision of the jurisdictional High Court has been upheld by the Hon’ble Supreme Court in the case of CIT v. HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT] - In view of the above, we are of the view that the telecommunication charges should be excluded both from the export turnover as well as total turnover while computing deduction u/s.10A of the Act. The order of the DRP is therefore upheld.
Considering gains/loss arising from fluctuation of foreign currency as being operating in nature - as submitted that the gains on account of fluctuation in foreign currency has arisen from the international transaction of provision of ITE services and SWD services - HELD THAT:- The Hon’ble Delhi High Court in the case of PCIT Vs. B.C. Management Services (P) Ltd.[2017 (12) TMI 255 - DELHI HIGH COURT] held that foreign exchange gain has to be regarded as part of operating income by following its own order in Pr. CIT v. Cashedge India (P.) Ltd. [2016 (5) TMI 1348 - DELHI HIGH COURT].Respectfully following the said decision, we uphold the directions of the DRP and dismiss Gr.No.3 to 5 raised by the Revenue.
Exclusion of comparable companies in ITeS segments - Acropetal cannot be considered as a comparable to assessee performing routine low end IT enabled services function. This company is therefore to be excluded from the list of comparable companies.
Jeevan Scientific Technology Ltd., we find that this company is engaged in diverse functions and the same were reported under one segment without segmental details regarding the same being made available. Without segmental details, the comparability of the company cannot be determined. In any event, the ERP segment of the company is not comparable to the assessee, the BPO segment of the company fails the filter of service income being greater than 75% of total revenue, and the company suffers from huge fluctuations which indicate that certain peculiar circumstances influencing the profit margin of the company exist, for which appropriate adjustments cannot be made to balance the effect. This company is therefore excluded as comparable company.
Accentia Technologies Ltd is engaged in rendering routine low end information technology enabled services. Further, the said company not only does medical transcriptions, but has also ventured into healthcare receivables cycle management and high end consultancy to start-ups requiring field experts. As can be seen from the annual report, coding income is contributing 15% of the total income which activities are akin to software development activity while the assessee is a mere provider of IT enabled services. The company has invested huge sums in the development of EMR software. Segmental details of its various activities are unavailable, therefore, not comparable to the Assessee and rejected as a comparable.
ICRA Online Ltd is functionally dissimilar for the reason that the outsourced services segment of the company is engaged in the provision of high end consultancy services which cannot be compared to the assessee who is into provision of low end IT enabled services which are routine in nature. Further, the company fails the TPO’s own filter of export turnover in excess of 75% of total sales as the export turnover of the company amount to only 61.88% of its sales. Therefore, the company cannot be held as a comparable to the assessee.
-
2021 (9) TMI 1375 - GUJARAT HIGH COURT
Seeking release the assets seized pursuant to the search and seizure u/s 132 in case of sibling of the petitioners - During the search and seizure proceedings, jewelry owned and possessed by the petitioners also have been seized and not released till date - HELD THAT:- .As it is the case of the petitioners that they were able to explain the source of jewellery and the place from which it was purchased as well as show the Wealth Tax Return for the A.Y. 2012-13 filed by the petitioners and other family members worth of ₹ 2 Crores (rounded off). Thrice communications have been sent and requests are also made to return the same, however, till date, neither reply has been given nor has the jewelry been returned. According to the learned advocate Mr. Patel, in case of brother of the petitioners, Assessment Order has been passed on 10.03.2016 where no addition has been made by the authority concerned, and none of the communications made by the petitioner has been replied to client. It is further urged that challenge is made to the order of Assessing Officer before the appellate authority, present status of which, he can reveal on the next date of hearing.
-
2021 (9) TMI 1374 - ITAT DELHI
PE in India - Income deemed to accrue or arise in India - attribution of income arising from the contracts - activities of Project Office of the assessee - Whether CIT(A) erred in holding that the Project Office of the assessee in India is not its fixed place of business and Permanent Establishment as defined under Article 5 (2) (c) of the Double Taxation Avoidance Agreement between India and UAE? - appeal of the revenue mainly relates to the provisions of Article 5(2)(c) with regard to treating of project office as fixed place PE, the preparatory and auxiliary functions as per Article 5(3)(e) and treating the assessee as installation PE under Article 5(2)(h) of DTAA between India and UAE - HELD THAT:- As the counsels brought to the notice of the bench that the issue stands squarely covered by the order of the Hon’ble High Court of Delhi [2016 (2) TMI 47 - DELHI HIGH COURT] The judgment dealt with Fixed Place PE, Installation PE and Dependent PE in the assessee’s own case for the A.Ys. 2007-08 [2012 (10) TMI 257 - ITAT DELHI] and 2008-09 [2013 (10) TMI 753 - ITAT DELHI] and the Hon’ble High Court held that the assessee did not have a PE in India and no income from the project in question can be contributed to the assessee’s PE.
In the absence of any material change in the facts of the case and legal proposition, following the judgment of Hon’ble High Court mentioned above, we hereby dismiss the appeal of the revenue.
-
2021 (9) TMI 1372 - ITAT DELHI
PE in India - attribution of profits - existence of a subsidiary in India which is carrying on its own business as commission agent of the appellant - Scope of India-Netherlands Double Taxation Avoidance Agreement - HELD THAT:- As relying on assessee's own case [2017 (7) TMI 420 - ITAT DELHI] substantiate the allegation of deputation of any employees for rendering Technical support services, in view of this we do not agree with the revenue that services are rendered in India by deputation of employees in India by the appellant. With respect to the payment of royalty, It was submitted that Indian entity from time to time participates in various trade fairs and disseminate information about the products and engaged in promotional activity and for this purpose, it has right to use the trademark which is not held by the appellant but different entity. As this transaction is not between the appellant and the Indian entity where it is undisputed that the trademarks are not owned by the appellant but by different entity, these facts does not lead to creation of a permanent establishment in India of appellant
Thus we hold that the assessee company does not have any Permanent Establishment in India. Since, the question regarding Permanent Establishment is being answered in favour of the assessee, the issue of attribution of income in the hands of such Permanent Establishment becomes infrutuous. Accordingly, the grounds raised by the assessee are allowed.
Treatment of software and sale of subscription receipts as the royalty income under Article 12(3) of the India-Netherlands DTAA - HELD THAT:- The issue of software royalty was recently adjudicated by the Hon’ble Apex Court in the case of Engineering Analysis Center of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] has analyzed various aspects of the issue taking into consideration end user license, Copy Right Act, and provisions contained in DTAA and the Income Tax Act and has laid down the parameters to test whether the receipt from sale of software would tantamount to royalty or not. Therefore, in view of the above, the Assessing Officer is directed to carry out the necessary exercise in accordance with the directions issued by the Co-ordinate Bench in Assessment Year 2008-09 [2017 (7) TMI 420 - ITAT DELHI] duly keeping in mind the ratio laid down by the Hon’ble Apex Court in the case of Engineering Analysis Center of Excellence Pvt. Ltd. vs. CIT (supra) and adjudicate the issue accordingly after giving due and proper opportunity to the assessee to present its case. Thus, ground Nos. 3 & 4 are allowed for statistical purposes.
Taxing of income from provisions of service by treating the same as Fee for Technical Services - assessee has received payment to the extent in lieu of services rendered to Indian customers. The services so provided are in the nature of installation services, warranty services, or professional services such as data migration, disaster management etc. - HELD THAT:- It is undisputed that the impugned addition in the year under consideration is solely based on the reasoning recorded in assessment orders for Assessment Years 2008-09 and 2010-11. Since, the findings of the Assessing Officer with regard to this issue in 2008-09 & 2010-11 are no longer valid as having been disproved by the Co-ordinate Bench of this Tribunal, we find no reason to uphold the action of the Assessing Officer in taxing the impugned receipts in India.
Thus, the Co-ordinate Bench of the Tribunal has specifically held that services performed by the assessee company cannot be taxed in India in absence of satisfaction of make available clause. In absence of change in facts and keeping in view the uniformity in the nature of services, we find no justification in the action of the Assessing Officer in bringing to tax service receipts as FTS and the addition so made is directed to be deleted. Accordingly, Ground No.5 stands allowed.
Addition on account of sale of products by the assessee company to M/s NetApp India - AO as observed that the assessee failed to explain why the amount so received is not taxable in India and that no agreement, evidence or documents were produced before him to demonstrate the nature of transactions and goods sold - HELD THAT: - Assessing Officer has considered the income from the sale of equipment as business income taxable in India. However, it is worthwhile to know that as per Article 7 of the India-Netherland DTAA, the business income earned by a resident of a state from business carried in another State is taxable only in the resident state unless such business is carried in other State through PE. In the present case, we have already held that the assessee company does not have a Permanent Establishment in India and as such the business income so arising on sale of equipment cannot be taxed in India as per the express provision of Article 7 of DTAA. Accordingly, the Assessing Officer is directed to delete the addition made on account of business income. This ground is accordingly allowed.
Charging to interest u/s 234B - HELD THAT:- This issue of chargeability of interest is set aside to the file of the Assessing Officer with a direction that in case the assessee has any income chargeable to tax in India and if the same is subject to withholding to tax, no interest u/s 234B should be charged. Ground No.10 accordingly is allowed.
-
2021 (9) TMI 1370 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Bogus purchases - assessee has failed to substantiate the transactions claimed in its return of income thereby evaded taxes to that extent - CIT-A deleted the penalty levy - HELD THAT:- Disallowances has been made on an estimated basis on account of the non production of suppliers before the AO. The purchase vouchers were duly produced and the payments were through banking channel. In these backgrounds, in our considered opinion assessee cannot be visited with the rigours of penalty u.s 271(1)(c). As a matter of fact, on many occasions, on similar circumstances in quantum proceedings, the disallowance itself has been deleted. In our considered opinion, on the facts and circumstances of the case assessee cannot be said to have been guilty of concealment or furnishing of inaccurate particulars of income. In this regard, we draw support from the decision of the State of Orissa [1969 (8) TMI 31 - SUPREME COURT] where in it was held that the authority may not levy the penalty, if the conduct of the assessee is not found to be contumacious.
Tax effect in this case is below the limit fixed by CBDT for filing appeals before ITAT. The revenue has tried to make out a case that since the addition was made pursuant to information from Sales tax department, this penalty appeal falls in the exception carved out in the CBDT circular regarding appeals arising out of additions made pursuant to information from outside agencies. We are of the opinion that this plea is not tenable inasmuch as once revenue accepts that penalty is levied on outside agency information, the penalty levied will have no legs to stand. We delete the levy of penalty - Decided in favour of assessee.
-
2021 (9) TMI 1364 - ITAT CHANDIGARH
Revision u/s 263 - As per CIT AO has passed the assessment order u/s 143(3) of the Act, without making any enquiry or verification on the issue of share premium received and applicability of section 56(2)(viiib) - HELD THAT:- From the observations of the Ld. Pr. CIT, it can be inferred that the AO has examined the genuineness of the transaction and did not find any infirmity with regard to the identity and creditworthiness of the share applicants and the genuineness of the transaction. Under these circumstances the Ld. Pr. CIT has wrongly assumed that the AO has not examined the applicability of section 56(2)(viib) of the Act.
This is not a case of no enquiry. As pointed out by the Ld. Counsel, during the assessment proceedings the assessee produced the complete detail called for by the AO except the valuation report, which was produced before the Ld. Pr. CIT in compliance to his directions given during the appellate proceedings. In our considered view, the AO has passed the assessment order after examining and verifying the documents and the details furnished by the assessee.In the present case since the AO has passed the assessment order after due application of mind and after accepting the explanation given by the assessee the same cannot be termed as erroneous. Therefore, in our considered view the observation of the Ld. Pr. CIA that AO has passed the order without making proper enquiries is not factually correct, hence not sustainable.
Whether Pr. CIT has wrongly rejected the valuation of shares @ ₹ 33.44? - Evidence on record do not suggest that the valuation report submitted by the assessee had been prepared without verification of the data supplied by the assessee. Hence, we do not find any merit in the contention of the Ld. DR that the Ld. Pr. CIT has rightly rejected the valuation report submitted by the assessee. We therefore, do not find any cogent and convincing reason for rejecting the valuation report prepared as per the provisions of law and the guidelines issued by the Institute of Chartered Accountants of India. Hence, in our considered view Ld. Pr. CIT has wrongly rejected the method of valuation of shares adopted by the assessee for determining the fair market value.
We hold that the Ld. Pr. CIT has failed to show the twin conditions for exercising jurisdiction u/s 263 of the Act that the order passed by the AO is erroneous as well as prejudicial to the interest of the revenue. Since, the AO has passed the assessment order after conducting proper verification of the details furnished and considering the explanation given by the assessee, we find merit in the contention of the assessee that the impugned order passed by the Ld. Pr. CIT is beyond the scope of section 263 - Decided in favour of assessee.
-
2021 (9) TMI 1361 - ITAT PUNE
TP Adjustment - ALP determination - whether intra groups activities performed by Nalco US under SA and by Nalco Pacific under the RMASA constitute intra group services and the said activities are not in the nature of stewardship activity? - HELD THAT:- It is common submission by both the sides that the issue raised in this appeal is similar to the one raised in the Revenue’s appeal for the immediately preceding assessment year, 2009-10. Except for increase in mark-up rate under the two agreements, both the sides fairly conceded, that nature of the services is unchanged. The appeal for the assessment year 2009-10 was fixed simultaneously with the extant appeal. During the course of hearing of the appeal for the immediately preceding year, both the sides made elaborate submissions.
In fact, the parties adopted their submissions made for the earlier year insofar as the instant appeal is concerned. This shows that the nature of services availed by the assessee from Nalco, USA and Nalco Pacific Pte Ltd., Singapore is similar to that of the preceding assessment year. We have passed separate order for the assessment year 2009-10 approving the view taken by the CIT(A) to the effect that the services received by the assessee were in the nature of intra group services and not stewardship activity. Since the dispute in the instant appeal, as appearing from the ground extracted above, is only on the nature of the services, following our view taken for the immediately preceding year, we countenance the impugned order on this score.
It is made clear that the Revenue has challenged only the ascertainment of the nature of services by the ld. first appellate authority and not the ALP determination of the international transaction by the ld. CIT(A).
-
2021 (9) TMI 1359 - ITAT CHENNAI
Reopening of assessment u/s 147 - As argued AO has not recorded reasons properly and he has not mentioned that there is no escapement of income therefore, the reopening is invalid - HELD THAT:- From reasons that the finding given by the A.O is that the assessee has already claimed as a provision for debt and same is allowed. Subsequently, the assessee has received an amount of ₹ 209.61 crores under Agricultural Debt Waiver and Debt Relief Scheme, 2008. It is very clear that the amount, which is already claimed as a bad debt by the assessee and again assessee has received the same amount under debt waiver and debt relief scheme. According to the A.O, there is an escapement of income. Accordingly, the A.O has issued a notice u/s. 148 of the Act and completed assessment u/s. 143(3) r/w. s. 147 of the Act on 29.12.2017.
We are of the opinion that the A.O has correctly recorded the reasons and reopened the assessment and completed the assessment u/s. 147 of the Act thus, the reopening is valid.
Whether the amount received under Agricultural Debt Relief and Debt Waiver Scheme is taxable or not? - As decided in own case [2019 (8) TMI 723 - ITAT CHENNAI] under the scheme of Income-Tax Act, the CIT(A) has no power to set aside the assessment for reconsideration. However this Tribunal is of the considered opinion, it has to be verified whether the interest income was offered for taxation earlier. Accordingly in exercise of jurisdiction conferred on this Tribunal, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh in accordance with law after giving reasonable opportunity to the assessee.
-
2021 (9) TMI 1355 - BOMBAY HIGH COURT
Stay of recovery - HELD THAT:- The stay has been in force for almost three years. The Miscellaneous Application rejecting recall of the order of stay was dismissed almost two and half years ago. The Appeal itself is ripe for hearing. In our view, interest of justice will be met if the Tribunal is requested to dispose of the Appeal on the next date of hearing and in any case by 30th November, 2021.
-
2021 (9) TMI 1350 - ITAT VISAKHAPATNAM
Disallowance of employees contribution to PF and ESI - Payment before the due date for filing the return of income - HELD THAT:- Employees contribution to PF and ESI is allowable deduction if the same is paid before the due date of filing the return of income. In the case of APEPDCL [2016 (9) TMI 1040 - ITAT VISAKHAPATNAM] after considering the decision of Hon’ble Karnataka High Court in the case of Essae Teraoka (P) Ltd. [2014 (3) TMI 386 - KARNATAKA HIGH COURT] and the decision of coordinate bench of ITAT Hyderabad in the case of Tetra Soft (India) Pvt. Ltd. [2015 (10) TMI 1601 - ITAT HYDERABAD] and also taking support from the decision of Hon’ble Supreme Court in the case of CIT Vs. M/s Vegetables Products Ltd.[1973 (1) TMI 1 - SUPREME COURT] decided the issue in favour of the assessee.
-
2021 (9) TMI 1343 - ITAT BANGALORE
Reopening of assessment u/s 147 - Mandation of recording objections - main contention of the AR is that the AO has to dispose of the objections raised by the assessee for reopening the assessment by a separate speaking order and thereafter he has to frame the assessment order - HELD THAT:- In the present case, AO issued notice u/s. 148 dated 29.3.2016 served on the assessee on 30.3.2016. There was change in the incumbent of office of AO and the proceedings continued vide letter dated 26.7.2016 and by one more letter dated 3.8.2016. Assessee sought reasons for reopening of assessment on 3.10.2016 which was furnished to the assessee on 24.10.2016.
AO dealt with the objections raised by the assessee in his assessment order itself, though not by a separate order and completed the assessment on 30.12.2016. Now the grievance of the assessee is that the objections of the assessee was not disposed by the AO by a separate order. AO duly considered the objections and disposed the same by discussing it in his assessment order itself. In our opinion, he should have disposed it by a separate speaking order, however, it would not lead to nullity of the order. The case laws relied on by the ld. DR on this point are applicable to the facts of the present case.
Accordingly, in the interest of justice, we vacate the orders of the lower authorities and remit this legal issue back to the file of the Assessing Officer for deciding the objections of assessee for reopening the assessment by a separate and speaking order, and in case the objections of the assessee is rejected, then the AO is required to pass a fresh assessment order, after adequate opportunity of being heard to the assessee. Appeal by the assessee is partly allowed for statistical purposes.
-
2021 (9) TMI 1342 - SC ORDER
Assessment u/s 153A - Whether no incriminating material found in search? - HELD THAT:- Issue notice. Tag with Civil Appeal[2021 (2) TMI 1263 - SC ORDER]
-
2021 (9) TMI 1341 - SC ORDER
Assessment u/s 153A - Deemed dividend addition u/s 2(22)(e) - HC held that Revenue does not urge that it discovered any new material justifying the addition under Section 2(22)(e). Rather, there was no material to connect the additions made under that head - HELD THAT:- Issue notice on the application for condonation of delay as well as on the Special Leave Petition.
Dasti, in addition, is permitted.
-
2021 (9) TMI 1340 - ITAT MUMBAI
Rectification of mistake u/s 154 - Addition of towards allocation of interest expenses towards dividend income, under the head business income - HELD THAT:- Since, the assessee has also raised additional ground No. 2, towards allocation of interest expenses towards dividend income which is not academics as noted by the Tribunal. We are of the view that once it is held that the investment giving rise to dividend income were made out of interest free funds, the disallowance of interest expenditure while computing profits and gains of business was not justified. Hence, we are of the view that this interest expenditure need to be allowed. We direct the Assessing Officer accordingly. This mistake is rectified.
Treatment of sales Tax incentive and fertilizer subsidy as income eligible for claiming of deduction under section 80IB - HELD THAT:- We noted that the facts relating to the issue whether the sales tax incentives or fertilizers subsidy is capital receipt or revenue receipt, the adjudication by Tribunal is not there. Even, the facts are not dealt with by the Tribunal in its order. Hence, without commenting on the facts, we recall the order of the Tribunal on this issue and direct the registry to fix this appeal.
-
2021 (9) TMI 1339 - CALCUTTA HIGH COURT
Assessment u/s 153A/153C - violation of principle of natural justice - Whether before passing the objections/representations made by the petitioners against the initiation of impugned proceedings u/s 153C were considered or not and if not, then is it a violation of principle of natural justice? - HELD THAT:- Since in this case it appears from record that the representations/objections of the petitioners were not considered and disposed of before passing the aforesaid impugned assessment orders an no opportunity of hearing was given to the petitioners which is a clear violation of principle of natural justice, without going into the merits of the impugned assessment orders and the aforesaid objections/representations of the petitioners, on the ground of violation of principle of natural justice alone, setting aside the aforesaid impugned assessment orders dated 22nd May, 2021 being Annexure P-10 to the writ petition and remanding the case of the petitioners to the respondents concerned to consider and dispose of the aforesaid two representations/objections dated 23rd April, 2021 and 4th May, 2021 made by the petitioners in accordance with law and by passing a reasoned and speaking order and after giving an opportunity of hearing to the petitioners or their authorised representative within four weeks from the date of communication of this order and further continuation of the assessment proceedings in question will depend upon the outcome of the final order to be passed upon the aforesaid objections/representations of the petitioners.
It is recorded that this court has set aside the aforesaid impugned assessment orders on limited ground of violation of principle of natural justice of not considering and disposing of the aforesaid representations/objections of the petitioners and this Court has not gone into the merits of the case. In this matter, the respondent Assessing Officer will proceed strictly in accordance with law while disposing of the aforesaid representations/objections of the petitioners
-
2021 (9) TMI 1337 - ITAT DELHI
Income Accrued in India - revenue received by the assessee from supply of software - taxability in India as royalty/s 9(l)(vi) of the Income Tax Act, as well as Article 13(3) of the India - France DTAA - HELD THAT:- As decided in Alcatel Lucent International France [2021 (7) TMI 829 - ITAT DELHI] the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 - Decided in favour of assessee.
-
2021 (9) TMI 1336 - ITAT JODHPUR
Late deposit of employees share of PF & ESI - additions of the impugned amounts for the reasons that the assessees did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - Scope of amendment - HELD THAT:- In the present cases, it is not in dispute that the assessees deposited the contribution of PF & ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s 139(1). See MOHANGARH ENGINEERS AND CONSTRUCTION COMPANY VERSU [2021 (8) TMI 563 - ITAT JODHPUR], SALZGITTER HYDRAULICS PRIVATE LIMITED [2021 (6) TMI 1059 - ITAT HYDERABAD] and HARENDRA NATH BISWAS [2021 (7) TMI 942 - ITAT KOLKATA]
Thus additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee.
........
|
