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Income Tax - Case Laws
Showing 81 to 100 of 9151 Records
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2015 (12) TMI 1797
Long Term Capital Gain on sale of land - HELD THAT:- The appellant's case does not call for any interference in so far as treatment of land as investment is concerned. Therefore, the action of the AO in interfering with the entries made w.e.f. 1.4.2000 was completely uncalled for without bringing anything to the contrary on record to suggest that the appellant was a dealer in land. The said piece of land has been held for over 20 years without any development potential or even laying of an inch of brick on the same and therefore, in all fairness, claim made by the appellant regarding LTCGs cannot be faulted.
Gain arising on sale of plot as capital gains rather than business income - HELD THAT:- Plots held for development purposes were shown separately in the assessee’s Balance Sheet as WIP and the plots held for investment were shown as investment even in the balance sheets for A.Y.2006-07 to 2008-09. We also found that these plots were always valued at cost year after year and not at cost or market price whichever was lower and hence, the same could not be treated as stock in trade. The detailed finding recorded by CIT(A) to the effect that land was held as investment, is as per material on record. We, therefore, do not find any reason to interfere in the findings of the CIT(A). Nothing was brought on record by DR to controvert the finding of the CIT(A). No reason to interfere in the findings of CIT(A) so as to tax the gain arising on sale of plot as capital gains rather than business income - Revenue is dismissed.
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2015 (12) TMI 1796
Renewal of approval u/s. 80G(5), grant of continuation of registration u/s. 12A and application for fresh registration u/s. 12A rejected - assessee has not been able to show that the assessee was earlier granted registration u/s. 12A - HELD THAT:- Assessee had furnished sufficient evidence in support of his claim that it has been earlier enjoying the benefit u/s. 80G in the past and categoric statement of the assessee that the original registration certificate issued u/s. 12A has been misplaced, there was no occasion for the Commissioner of Income Tax to ask for any further document in support of earlier registration granted u/s. 12A of the Act.
Revenue has not been able to explain as to how the assessee was granted approval/extension u/s. 80G on regular intervals in the absence of registration u/s. 12A of the Act. Thus, we are of the considered view that the Commissioner of Income Tax has erred in rejecting the application of the assessee for issuing certificate of registration u/s. 12A of the Act as well as rejecting application for approval/renewal u/s. 80G of the Act.
Commissioner of Income Tax is directed to issue registration u/s. 12A and approval u/s. 80G w.e.f. assessment year 2010-11, i.e. the assessment year in which the benefit of section 80G was first denied to the assessee by the Assessing Officer.
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2015 (12) TMI 1795
Assessment u/s 153A - Addition u/s 68 - share application Money received - unsecured loan - HELD THAT:- Once notice u/s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then AO acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material.
But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized in relation to sale and repurchase of shares of Adroit India Ltd. No assessment proceedings were abated in these assessment years of these assessees. Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/s 143(3) of the Act read with section 153A/153C of the Act after the search.
There is no seized material belonging to the assessee which was found and seized in relation to additions made. In view of this fact, there is no justification for action u/s 153C of the Act that too without recording satisfaction. In our considered view, the Assessing Officer must have some material to prima facie satisfy himself to record the satisfaction prior to issue of notice u/s 153C .
Addition u/s 68 - It is not a simple case of taxing of share application money under section u/s 68 as the assessee has tried to project. It is a case of unaccounted income brought back into the books of accounts of the assessee company in a systematic & organized manner which can be evidenced from the pattern of cash deposits in the bank accounts of the companies discussed above in detail from whom share application money were received by the assessee. These companies have been used as mere conduit companies for routing of unaccounted money into the business in the grab of share application money. During the assessment proceeding in Asst.Year 2005-06 in the case of the companies from whom the assessee companies received share application money, it was reveal that cash deposits were found in their bank accounts but source of cash deposited were not properly explained by the above companies. Hence, the source of share application money as received by the assessee company can not be treated as properly explained.
Share application money as received by the assessee in the year under consideration be added to the income of the assessee U/s 68 of the Income Tax Act.
Chargeability of interest u/s 234B is mandatory, therefore, dismissed on merit.
Disallowance of income u/s 40(ia) - AO disallowed fright payment on the ground that no TDS was deducted - The assessee has taken the ground that by virtue of Finance Act, 2008 w.e.f. 1.4.2005, the said section was amended which says that if the amount so deducted is deposited by the assessee till due date of filing of return is allowable deduction prior to March in that case - HELD THAT:- In this case, TDS was deducted and payment was made prior to March, hence, assessee has paid the tax on time, therefore, he requested the Bench to allow this additional ground. It is the legal claim of the assessee, therefore, it may be allowed. We find that this claim is a legal claim of the assessee, which is allowable claim, therefore, in the interest of justice and fair play, we allow the ground of the assessee and restore this matter to the file of the Assessing Officer with direction to the Assessing Officer to decide the issue as per amended section as per law. Thus, ground of appeal is allowed for statistical purposes.
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2015 (12) TMI 1794
Penalty u/s 271(1)(c) - non specifying under which limb the Assessing Officer is satisfied for levying the penalty - Defective notice - HELD THAT:- The notice issued u/s 274 read with section 271(1)(c) did not specify the limb under which the penalty proceedings has been initiated.
Entire penalty proceedings have been initiated on the ground that the notice issued was not in accordance with law. We, therefore, following the case of the Hon’ble Karnataka High Court in the case of CIT vs. Manju Natha Cotton and Ginning Factory & Others [2013 (7) TMI 620 - KARNATAKA HIGH COURT] hold that the penalty proceedings suffers from grave illegalities. Merely because the addition made by the ld. Assessing Officer has been confirmed by this Tribunal is not conclusive to levy the penalty u/s 271(1)(c) as both the penalty proceedings as well as the quantum proceedings are independent from each other. We, therefore, allow the grounds of appeal filed by the assessee.
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2015 (12) TMI 1793
Levy of education cess on the payments made to non-resident - addition to the tax rates prescribed in DTAA entered by India with Germany, China and the United States of America (USA) - HELD THAT:- As relying on DIC ASIA PACIFIC PTE LTD VERSUS ASSISTANT DIRECTOR OF INCOME TAX [2012 (6) TMI 686 - ITAT, KOLKATA] direct the AO not to levy the education cess in respect of tax liability of the assessee company. - Decided in favour of assessee.
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2015 (12) TMI 1792
Reopening of assessment u/s 147 - Disallowance of deduction u/s 10A - assessee’s business of medical consulting services to pharmaceutical companies does not come under the services eligible for deduction u/s 10A/10B - HELD THAT:- Assessee-company produced the work orders from New Zealand and Switzerland companies who have entered into agreements on certain terms and conditions in compliance of laws of both the countries and also furnished the invoices made in foreign currency in respect of work orders for specified period.
AO, for assessment year 2011-12 has recorded the statement of the Director and acquainted with working procedure. Even after recording the statement, the Assessing Officer applies his own working system and overlooked evidential material produced in the assessment proceedings and judicial decisions of the Tribunal in the case of Accurum India P Ltd (2009 (11) TMI 550 - ITAT MADRAS-A). CIT(A) has examined the quality of evidence available on record vis-à-vis the explanations made by the assessee, and therefore, we do not see any reason to interfere with the order of the CIT(A). Accordingly, we uphold the CIT(A)’s order on this issue and dismiss the grounds of appeal raised by the Revenue.
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2015 (12) TMI 1791
Monetary limit - maintainability of appeal - “tax effect” - HELD THAT:- Instructions of CBDT where the tax effect is less than ₹ 10 lakhs, the appeals filed by the Revenue, which are pending before the Tribunal, are not to be pressed or withdrawn by the Revenue authorities. Since the tax effect in the above appeals filed by the Revenue is admittedly less than ₹ 10 lakhs in each case, therefore, in view of the instructions of CBDT and the entirety of facts, we dismiss the appeals filed by the Revenue as not maintainable. All the above appeals filed by the Revenue are dismissed.
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2015 (12) TMI 1790
Payments made by ONGC and received by the non-resident assessee or foreign companies - taxable u/s 44BB or 44D - receipts of Boots and Coots International Well Control Inc., USA - Providing various services in connection with prospecting, extraction or production of mineral oil - Fees for technical services under Section 44D read with Explanation 2 to Section 9(1)(vii) OR payments be taxable on a presumptive basis under Section 44BB - HELD THAT:- The said issue has already been decided in favour of the assessee by the Hon’ble Supreme Court of India in assessee’s own case [2015 (7) TMI 91 - SUPREME COURT] held that the dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated there-under. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assesses or foreign companies under the said contracts is more appropriately assessable under the provisions of section 44BB and not section 44D. - decided in favour of assessee
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2015 (12) TMI 1788
Disallowance u/s. 14A read with Rule 8D(2)(iii) - CIT(A) upholding the disallowance of administrative expenses made by AO on investment in shares - whether the entire administrative expenses was incurred by the assessee for the purpose of investment in shares? - HELD THAT:- We compared the heads of accounts of the expenses of the administrative and other expenses and in comparison we find majority of expenses claimed by the assessee are more or less on same accounts, i.e., auditors remuneration, depreciation, legal and professional fees, business support fees etc.
On perusing the schedule “L” related to administrative expenses we find none of the accounts are prima facie directly identifiable as one meant for earning the exempt of income. Some of the expenses so claimed in the schedule related to other business expenses. Similar is the case with the other appeals under consideration as well.AO mechanically applied the provisions of Rule 8D(2)(iii) without examining the books of accounts of assessee and therefore, the addition is unsustainable in law. See CAPE TRADING P. LTD. VERSUS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE – 29, MUMBAI [2015 (8) TMI 211 - ITAT MUMBAI] - Decided in favour of assessee
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2015 (12) TMI 1787
Interest paid on borrowings disallowance - HELD THAT:- This question stands concluded against the revenue as decided in earlier AY 1999-00
Treatment to sales tax incentive subsidy - revenue or capital subsidy - HELD THAT:- As the entire issue for the A.Y.2000-01 is still at large to be decided by the Assessing Officer consequent to the impugned order of the Tribunal the question as proposed does not give rise to any substantial question of law. Hence not entertained.
Transfer to Debenture Redemption Reserve to be excluded in computing book profits u/s 115JA - MAT - HELD THAT:- Issue covered against the revenue by the decision of this Court in CIT vs Raymond Ltd [2012 (4) TMI 127 - BOMBAY HIGH COURT]. In the above view, the question as proposed does not give rise to any substantial question of law
Allowability of sum paid by the Assessee Company to Himachal Pradesh State Electricity Board for setting up of Kangoo Power Sub-station - HELD THAT:- The revenue having accepted the decision of the Tribunal for assessment year 1999-00 on this issue by not having challenged the same, cannot now challenge the impugned order in the absence of any specific ground being made out justifying challenging the impugned order on this issue, when it is accepted for A.Y.1999-00. Accordingly, question G does not give rise to any substantial question of law.
Claim of expenditure in respect of temporary structures - revenue or capital expenditure - HELD THAT:- We find that both the CIT (A) as well as the Tribunal have rendered a finding of fact that the structure was constructed at the client's site and was temporary in nature. Further they have also rendered a finding that the temporary structure is necessary for the purpose of carrying out its business more efficiently and would be considered being an integral part of its profit earning process. Thus there is no advantage of enduring nature.
Expenditure incurred on construction of stadium - HELD THAT:- We find that the test of allowing such expenditure as laid down by the Supreme Court in SRI VENKATA SATYANARAYANA RICE MILL CONTRACTORS VS. CIT [1996 (10) TMI 2 - SUPREME COURT] that where the payment is out of commercial expediency and above board such expenses are to be considered to have been incurred in the course of business. Therefore allowable as an expenditure under Section 37 (1) of the Act as allowing an expenditure of commercial expediency and not whether it is compulsory or voluntary. On application of the above test, the view taken by the impugned order of the Tribunal is a possible view.
Appeal admitted on Questions nos. A, B and E.
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2015 (12) TMI 1786
Maintainability of appeal - monetary limit - HELD THAT:- CBDT has issued Circular No.21 of 2015 dated 10.12.2015, vide which it has revised the monetary limit to ₹ 10,00,000/- for not filing the appeal before the Tribunal.
From Clause 10 of the above circular it is clear that these instructions are applicable to the pending appeals also and there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 10,00,000/-. These instructions are operative retrospectively to the pending appeals.
CBDT Circular No.21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal - We dismiss the appeal filed by the department.
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2015 (12) TMI 1785
Maintainability of appeal - monetary limit - tax effect involved in the appeals of the Revenue is less than ₹ 10 lac - Held that:- There is no necessity for adjourning the appeals as the tax effect involved in the appeals of the Revenue is less than ₹ 10 lac the oral request was rejected. However, by way of abundant caution liberty is granted to the Revenue that in case on receipt of the order the Assessing Officer finds that the tax effect is above ₹ 10 lac or in any other manner the Circular is not applicable, he would be at liberty to file a Miscellaneous Application pointing out these facts. We also taking note of the concerns expressed by the ld.CIT, DR and make it clear that as a result of the dismissal of the Revenue’s appeals on the ground of tax effect the said order would not act as a precedent where the tax effect is more in any subsequent or prior year where the Revenue would want to agitate the issues on similar grounds before the ITAT on merit. - Decided against revenue
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2015 (12) TMI 1784
Disallowance on account of film preview expenses - Held that:- AO has not pointed out that the expenditure claimed by the assessee is excessive or abnormal in comparison to the normal expenditure being incurred on such exhibition of movie in the pre-release preview. The assessee produced complete details of the expenses though most or the expenses are incurred in cash, We find that keeping in view the nature of the expenses the payment in cash is inevitable for certain expenses which are on spot and for the purpose of snakes, refreshment, etc. The assessee has produced the vouchers which includes sell-made vouchers as well as the third party vouchers wherein the name of the movie is given. When the name of the movie and name of the theater is given, then the vouchers issued by the third party cannot be doubted. It is worth to be noted that the disallowance is restricted by the DRP is not based on the ground that it is excessive but for want of proper vouchers therefore, we find that the ad-hoc disallowance is not justified when the expenditure is not found to be excessive and the purpose and the occasion on which the expenditure was incurred is not disputed.
Disallowing legal expenses - disallowance made on the ground that the assessee was not able to substantiate these expenses with the help of complete evidences - Held that:- It is noted that this issue has been sent back by the Tribunal in A.Y. 2009-10 to the file of the AO with some directions. We find it appropriate to send this issue back to the file of the AO in pursuance to the order. We also direct the AO to follow the directions as given by the Tribunal in A.Y. 2009-10 as far as may be applicable on the facts of the case of this year. With these directions this issue is sent back to the file of the AO. Thus, ground no. 2 is allowed for statistical purposes.
Disallowance of expenses incurred by the assessee on foreign travelling - Held that:- It is noted by us that these expenses pertained to the foreign visit of Mr. Sanjay Gupta, director, of the company, on the ground that no evidence was submitted to establish business purpose for incurring these expenses. Before us also no such evidence has been produced and therefore, we have no option but to confirm the disallowance. Accordingly, disallowance is confirmed and Ground No. 3 is dismissed.
Disallowing incurred on Travelling, Advertising and Printing & Stationery expenses @ 5% on ad hoc basis by treating the same as personal expenditure - Held that:- We find that the assessee has submitted bills/vouchers as were maintained by it in regular course of business. If the AO was not satisfied with any particular items of expenses, he could have pointed it out to the assessee for inviting its response. In case AO was not satisfied with response of the assessee, then the same could have been considered for the disallowance. There should not be a practice of making an ad-hoc disallowance on the ground of personal expenditure, because there is no concept of personal expenditure in the case of a company. The company is a separate legal juristic person. In case any expenses are incurred on behalf of director or any other senior employees, then the same is liable to be taxed in the hands of the said person as part of perquisite/remuneration, as per law. In our considered view, disallowance had been made beyond the provision of law and therefore same is directed to be deleted. We find our support from the judgment in the case of Sayaji Iron and Engg. Co. (2001 (7) TMI 70 - GUJARAT HIGH COURT). Thus ground no. 4 is allowed.
Disallowing u/s 36(1)(iii) on proportionate interest expenditure - Held that:- We find that there being sufficient interest free own funds in possession of the assessee, no presumption should be drawn that the assessee has given the disallowance out of interest bearing funds only. Further, the amount has been invested with subsidiary of the assessee company and thus taking support from the judgment of Hon'ble Supreme Court in the case of S.A. Builders Ltd. (2006 (12) TMI 82 - SUPREME COURT) it can be said that no disallowance would be made if the amount has been advanced for the strategic business needs. The assessee has submitted copy of resolution signifying its business necessity. Taking in to account all the aforesaid facts and circumstances of the case, we find that the said disallowance is not sustainable as per law.
Disallowance u/s 14A, read with rule 8D - Held that:- We find that all these issues go to the root of the matter. These have not been properly dealt with by the DRP. The mind of the AO could also not be applied on all these issues at all. The assessee also could not get proper opportunity to explain this issue with proper evidences. There has been lot of development in the legal position with respect to all the contentions raised by the Ld. Counsel. These judgments which have been relied upon by the Ld. Counsel were not available before the AO/DRP. Therefore, for thrashing out the facts properly, and to meet ends of justice and in all fairness, we deem it appropriate to send this issue back to the file of the AO who shall decide this issue afresh. Needless to add, the AO shall offer proper opportunity to the assessee to file requisite details and documents, as per law. The AO shall take into account complete factual material and shall also consider the judgments as may be available at the time of deciding this issue afresh. With these directions, this issue is sent back to the file of the AO. This ground is allowed for statistical purposes.
Notional interest on the amount routed by the assessee company through its Dubai subsidiary for the purpose of its business - Held that:- This issue is entirely dependent upon the A.Y.2009-10 which has been disposed by the Tribunal. We have gone through the order of the Tribunal and find that the disallowance was made in the assessment year2009-10 on loan given to the same party. In this year, no fresh loan has been given rather amount of loan has been reduced on account of part payments received back from the said party. It is noted from the order of the DRP that opening balance due from the said party at the beginning of the year was ₹ 106.52 crores which was reduced to ₹ 73.96 crores at the end of the year. It is further noted that Hon'ble Tribunal in A.Y. 2009-10, after making detailed discussion held that the addition was illegal and therefore the same was deleted
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2015 (12) TMI 1783
Nature of receipt - incentive/subsidy received from the Central & State government - to be treated as revenue receipt or capital receipt - Held that:- The schemes launched was for setting up of new industries in the district of Kutch for the purpose of new employment opportunities and to make industrial and economic environment live. Thus, the scheme of incentives provided by the respective Governments was setting-up of a new unit and not for running of the business more profitably.
As said in PONNI SUGARS & CHEMICALS LTD. [2008 (9) TMI 14 - SUPREME COURT] the form and the source of subsidy are immaterial and what is material is whether the subsidy is for setting up for a industrial unit or running it for profitability. Similarly, the Central Excise exemption was given in the public interest for setting up of a new industrial unit in the Kutch District. Accordingly on the facts of the present case, we conclude that the incentive given by the State Government and the Central Government is nothing but capital receipts, because applying the “purpose test” the incentive / subsidy was given only for setting up of new industrial unit and economic development and generation of new employment opportunities in the Kutch District and not for running the industry for augmenting the profit on day-to-day business. Thus, We hold that the amount of incentive received by the assessee cannot be taxed as revenue receipt as it is purely on capital account.
Other plea raised by the AO in the order passed u/s 143(3) r.w.s. 153A, we agree with the contention of the Ld. Counsel that, none of the plant and machinery installed by the assessee for setting up of a new industrial unit has been funded by the Government subsidy. The subsidy here in this case is not specifically intended to subsidies the cost of capital or plant & machinery. The incentive in the form of subsidy by the government here in this case cannot be considered as payment directly or indirectly to meet any portion of the actual cost and hence it does not fall within the purview of Explanation 10 to section 43(1). Thus, this alternative plea as raised by Ld. AO is rejected - Decided n favour of assessee
Claim of prior period expenses - Held that:- Whole issue relating to prior period expenses is set aside to the file of the AO to be decided afresh after giving due opportunity to represent its case.
Disallowance u/s 14A - Held that:- We agree in principle with the Ld. Counsel that in case, assessee has own surplus fund which are in far excess of investment made, then no disallowance of interest should be made and this view stands covered by the decision of Hon’ble Bombay High Court in the case of HDFC bank Ltd.[2014 (8) TMI 119 - BOMBAY HIGH COURT]. Accordingly, the AO is directed to verify this contention and grant relief so far as interest disallowance is concerned. Further, the AO is also directed to apply the principles laid down by Delhi High Court in the case Chem Invest [2015 (9) TMI 238 - DELHI HIGH COURT] inasmuch as if there is no exempt income then, no disallowance should be made. - Appeal allowed for statistical purposes.
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2015 (12) TMI 1781
TPA - comparable selection - ‘M/s. Man Diesel India Limited’, as comparable company - Held that:- The undisputed facts on record are that the aforesaid company was having RPT transactions which appear to be well above the accepted limits. Requisite documents evidencing these facts are already held on record. But, these facts were not examined by the lower authorities. In view of the judgments relied upon by the Ld. Counsel, we find that since this issue goes to the root of the matter, the assessee should be given opportunity to raise a legal plea even at this stage before the Tribunal. In all fairness and to meet ends of justice, we find it appropriate to send this issue back to the file of AO/TPO for a fresh decision with respect to the said company.
The assessee shall put forth all requisite material before the AO/ TPO in support of its claim, for which proper opportunity should be provided. With these directions, we send this issue back to the file of the AO/TPO. Thus, additional ground is treated to be allowed for statistical purposes.
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2015 (12) TMI 1780
Depreciation on investments on government securities "held to maturity" - whether such securities were held as a investments and not as 'stock-in-trade'? - Held that:- Appearing for the parties agree that the point in issue is covered by the decision of this Court in KARNATAKA VIKAS GRAMEEN BANK [2015 (12) TMI 1420 - KARNATAKA HIGH COURT] as held assessee was following the method of accounting namely, "at cost or market value, whichever is lower". It is not in dispute that this practice was accepted by the Revenue throughout - notwithstanding the preparation of the balance sheet and describing the security under a particular nomenclature in compliance with the directions/instructions issued by the RBI, the assessee would be lawfully entitled to submit the tax returns on the real taxable income in accordance with the method of accounting consistently and regularly adopted.- Decided in favour of assessee.
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2015 (12) TMI 1779
TPA - whether the internal comparables should be adopted over external comparables for the purposes of computing ALP, in respect of transaction pertaining to export of goods - TNMM has been accepted by both the parties as MAM - Held that:- Internal comparables are to be preferred to external comparables. There is no dispute that the assessee has internal comparables. Geographical differences are not relevant when FOB price is considered.
Set aside the matter to the TPO with a direction to consider the sale in respect of export to AE’s at FOB value. Even otherwise, except for export to Germany, there are no geographical variations. The ld.TPO is directed to apply internal comparables, at FOB value, as in his view, this value is the comparable value. The assessee is directed to furnish the audited financials of the segmental accounts - Restore the issue to the files of the TPO/AO, for fresh adjudication of the ALP, as per the directions given herein - Decided in favour of assessee for statistical purposes.
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2015 (12) TMI 1777
Maintainability of appeal - tax effect - Held that:- On hearing the Ld. Departmental Representative, we find that the tax effect in these cases is less than ₹ 10 lakhs. The CBDT in its Circular No.21/2015 dated 10.12.2015 instructed its officers to withdraw all the appeals pending before the ITAT where the tax effect is less than ₹ 10 lakhs. This Tribunal is of the considered opinion that this Circular of CBDT is binding on the officers of the Department. Therefore, the Revenue cannot proceed further in these appeals. Accordingly, these appeals stand dismissed. - Decided against revenue.
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2015 (12) TMI 1771
Recovery of tax dues - income tax demand of ₹ 1468.64 crores - attachment of stock stocks of beer, foreign liquor (FL), and Indian made foreign liquor (foreign liquor), lying in the various godowns of APBCL. - Companies, which manufacture and supply beer, foreign liquor and Indian made foreign liquor to APBCL, invoked the jurisdiction of this court, under article 226 of the Constitution of India, contending that the stocks lying in the godowns of APBCL (which were attached by the Income-tax Department) belonged to them ; and any delay in the sale of the attached stock of beer would result in wastage of the entire stock. - The sale of the attached property (beer, foreign liquor and Indian made foreign liquor), in terms of the interim orders passed by this court, yielded ₹ 489.07 crores.
Under the guise of deducting manufacturing expenses, and incidental expenses for delivery, almost the entire sale proceeds of ₹ 489.07 crores has been handed over by APBCL to the petitioners and the Government of A.P, leaving a paltry sum of ₹ 3.44 lakhs (rupees three lakhs forty-four thousand only) as the balance remaining in the separate account being maintained in terms of the interim orders passed by the Division Bench. - These acts of subterfuge has rendered the attachment order, passed by the Tax Recovery Officer, redundant for, even if the writ petitions were to be dismissed later, the Income-tax Department would be left only with ₹ 3.44 lakhs
Whether an interlocutory order, which travels beyond even the main relief sought for in these writ petitions and, in effect, results in the writ petitions being allowed, without even a counter-affidavit being filed by the respondent-Income-tax Department, can be passed at the stage of admission of the writ petitions?
Held that:- Power to grant ad interim ex parte orders should be exercised with great circumspection - Ordinarily ad interim orders, which have the effect of granting the main relief itself, should not be passed - Interim orders should not be passed for the mere asking.
Are the parameters for grant of, and in continuing, the interim orders, fulfilled in the present cases? - Held that:- Courts have to strike a balance between two extreme positions, on the one hand whether the writ petition would itself become infructuous if interim order is refused, and the enormity of losses and hardships which may be suffered by others if an interim order is granted, particularly having regard to the fact that, in such an event, the losses sustained by the affected parties thereby may not be possible to be redeemed - Before an interim order is passed, the court must consider the question as regards existence of a prima facie case, balance of convenience, and whether the Writ petitioners would suffer irreparable injury, if the interim relief sought for is refused.
Has a prima facie case been made out in the present batch of writ petitions? - Held that:- As the writ petitions have already been admitted, it must, necessarily, be presumed that the petitioners have made out a prima facie case. The fact, however, remains that a strong prima facie case, of a standard much higher than just a prima facie case, must be made out for an interim order to be passed, which would amount to granting the final relief in the writ petition. We are afraid that the petitioners have not made out a strong prima facie case for the grant of such relief.
Does the balance of convenience lie in favour of the petitioners, and would they suffer irreparable injury if the interim orders are vacated? - Held that:- Considerations of balance of convenience, and irreparable injury, forcefully tilting the balance totally in favour of the petitioners, would alone justify granting a final relief by way of an interim order. While the balance of convenience may be in favour of retaining the sale proceeds in a separate account, and the amount therein to be paid to the person held entitled thereto on the writ petitions being finally heard and decided, it is certainly not in favour of the petitioners being paid the entire sale proceeds even without an adjudication of their claim that they continue to retain title over the goods even after its delivery to APBCL - As the petitioners could have been paid these amounts later also, there were no compelling circumstances, for APBCL not to retain the sale proceeds in a separate bank account, otherwise than on account of the interim orders passed by this court earlier. The interim orders, to the extent it permitted the manufacturing expenses and incidental expenses for delivery, to be adjusted from the sale proceeds must be, and is hereby, vacated.
As a substantial part of the sale proceeds have already been paid by APBCL to the petitioners and the Government of Andhra Pradesh, what orders can this court pass consequent upon the interim orders, passed earlier, being vacated in part ? An order of stay, granted pending disposal of a writ petition or other proceeding, comes to an end with the dismissal of the substantive proceeding. It is the duty of the court, in such a case, to put the parties in the same position they would have been but for the interim order of the court, applying the doctrine of restitution. The jurisdiction to make restitution is inherent in every court, and should be exercised whenever justice of the case demands.
The petitioners herein and the Government of Andhra Pradesh shall forthwith and, in any event, on or before January 20, 2016, redeposit the amounts received by them from APBCL on the sale of the stocks (beer, foreign liquor and Indian made foreign liquor) attached by the Income-tax Department. Such redeposit would ensure that the entire sale proceeds (i.e., ₹ 489.07 crores less the TDS of ₹ 4.81 crores) remain in the separate account directed to be maintained by this court. The interests of the petitioners, the Income-tax Department, and the Government of Andhra Pradesh would be secured thereby as, after the writ petitions are finally heard and decided, these amounts can be paid to those entitled thereto. - The amount lying in the separate account, after redeposit of the amounts as directed hereinabove, shall be invested by the APBCL in short- term cumulative fixed deposits, and proof thereof shall be furnished to the Income-tax Department latest by January 26, 2016. The amounts invested in fixed deposits shall be subject to the result of the writ petition.
Petition disposed off.
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2015 (12) TMI 1770
Assessment of income from the sale of 18 flats - selection of assessment year - “transfer” in terms of Section 2(47) - Held that:- Tribunal was justified in holding that the income from the sale of 18 flats to M/s Audi Constructions Pvt. Ltd., is not assessable in the year 2008-2009 as on the basis of the facts on record, the learned Tribunal found that the assessee had not delivered the possession of the flats to M/s Audi Constructions Pvt. Ltd. in the subject year. Tribunal also found that it is not the case of the appellant that the agreements executed by assessee are bogus or fictitious upon appreciating the evidence on record and as such, there is no substantial question of law which can arise in the above appeals as this Court in the present appeals cannot reappreciate the evidence on record.
Tribunal also refused the contention of the appellant upon appreciating the evidence on record to come to the conclusion that the provisions of Section 2(47) have not been satisfied. Substantial questions of law proposed by the appellant as such would require re-appreciation of evidence which exercise cannot be done in the above appeals under Section 260A of the Income Tax Act as the learned counsel appearing for the appellant as pointed out herein above has failed to show that there is any perversity in such findings or that any material evidence has been discarded or that the learned Tribunal has come to such conclusion by misreading the evidence on record.
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