|
Advanced Search Options
Income Tax - Case Laws
Showing 61 to 80 of 533 Records
-
2017 (7) TMI 1337 - ITAT COCHIN
Claim for exemption u/s 10(37) denied - whether negotiated sale after acquisition proceedings falls under compulsory acquisition under the Land Acquisition Act? - HELD THAT:- Admittedly, the land was acquired under Land Acquisition Act and additional compensation was received after negotiating and signing the sale deed.
When the land was acquired by invoking the provisions of Land Acquisition Act, the dictum laid down by the Hon’ble Apex Court in BALAKRISHNAN VERSUS UNION OF INDIA & ORS [2017 (1) TMI 1380 - SUPREME COURT] will have application to the facts of the case, though the enhanced compensation was paid after negotiating and signing of the sale deed. Further, on perusal of the certificate issued by the revenue authority, it is clear that the impugned land is an agricultural land where agricultural operation was carried on till it was acquired. Therefore, the provisions of section 10(37) has application to the facts of the instant case and the amount received by assessee on acquisition of such land would not be includable in the total income. It is ordered accordingly.
-
2017 (7) TMI 1335 - ITAT BANGALORE
TP Adjustment - Comparable selection - HELD THAT:- Assessee is into software development services provider thus companies functionally with that of assessee need to be deselected from final lit.
When there is no change in the business activity of assessee for the year under consideration as well as in the functions of the said company then in view of the earlier order of this Tribunal in assessee's own case we hold that this company cannot be considered as a good comparable of the assessee and accordingly, the TPO/AO is directed to exclude the same from the set of comparables.
Since we have directed the TPO/AO to exclude certain companies from the set of comparables in both segments, therefore the ALP has to be computed on the basis of the remaining comparables. We may clarify that in Sales & Marketing Support Service Segment, only one company is left in the list and therefore the TPO has to consider the benefit of second proviso to Section 92C and decide the same as per law.
Deduction u/s 10A - HELD THAT:- The term export turnover is defined in clause (iv) of Expln. 2 inserted at the end of section 10A and provides that the expenditure on freight, telecommunication charges or insurance attributable to the delivery of article or thing or computer software outside India are required to be excluded from the consideration in respect of export brought into India. The expenditure if any incurred in foreign exchange in providing technical services outside India is also to be excluded from the consideration in respect of export of the undertaking. Thus if the expenditure in question is not falling in the category of charges of freight, telecommunication charges or insurance and it has been incurred in the foreign exchange then only when this expenditure is incurred in providing the technical services outside India, the same has to be excluded as per the definition provided under Explanation 2(iv) inserted at the end of Section 10A. Accordingly, we set aside this issue to the record of Assessing Officer for limited purpose of verification of the nature of expenditure and in case it is not for freight, telecommunication charges or insurance then the same cannot be excluded except it is incurred for providing the technical service outside India.
Foreign exchange fluctuation gain/loss - HELD THAT:- As considered the relevant material on record. If the foreign exchange fluctuation gain or loss is arising on account of realization of export turnover then the same is in the nature of operating revenue or loss. Therefore we do not find any error or illegality in the order of the DRP in deciding this issue and holding that the same is operating in nature.
-
2017 (7) TMI 1334 - ITAT CHENNAI
Addition u/s 68 - non-genuine creditors - HELD THAT:- Similar issue came for consideration before this Tribunal in assessee's own case for assessment year 2012-13 [2016 (9) TMI 711 - ITAT CHENNAI]Tribunal observed that the books of accounts of assessee was not reliable and income of assessee to be estimated after considering the average rate of profit of A.Y 2010-11, 2011-12 & 2012-13 as declared by the assessee. Accordingly, in this assessment year under consideration also, we direct the AO to estimate the income of assessee by considering the average G.P rate of assessment years 2011-12, 2012-13 & 2013-14 as declared by the assessee and decided accordingly. This issue of Revenue raised in its ground partly allowed for statistical purposes.
Addition made on account of unexplained investment in Chilling Plants - at the time of survey in statement recorded on 06/11/2013 Managing Partner of the assessee Firm, had stated that upto 31/3/13 investment in the newly under construction chilling plant units at Karur and Namakkal was around ₹ 3,60,00,000/-. - HELD THAT:- AR has rightly pointed out by the ld.A.R that there is no evidence to suggest that this investment is based only on unsubstantiated statement made by its partner Shri S.P.Loganathan, Managing Partner of the assessee firm during the course of survey on 06.11.2013. As held by the Supreme Court in the case of S.Khader Khan sons [2013 (6) TMI 305 - SC ORDER] , statement under section 133A are not conclusive piece of evidence by itself and it cannot be relied upon for the prupose of assessment . Being so, we do not find any infirmity in the order of the CIT(Appeals) for deleting the addition made by the AO. Hence, this issue raised by the Revenue is rejected.
Disallowance of milk cans and crates - nature of expenses - assessee had claimed as revenue expense disallowed, but AO holding them to be capital expense - CIT(A) observed that no enduring benefit is conferred warranting to treat expenditure on milk cans as capital in nature - HELD THAT:- The decision of the Ld.CIT(A) is based on the Order of Tribunal in the case of M/s.Tirumala Milk Products P Ltd. [2011 (2) TMI 1572 - ITAT VISAKHAPATNAM] . Being the expenditure towards plastic cane and crate, which is not an enduring nature, 100% depreciation to be granted as revenue expenditure. Hence, this issue in Revenue’s appeal is dismissed.
Disallowance of firewood purchase expenses - noticed by the AO that assessee had incurred expense for purchase of firewood in cash as well as by cheque. The cash vouchers were self made - HELD THAT:- As rightly pointed out by the ld.A.R that payments towards purchase of fire wood, which is being a forest products exception provides under Rule-6DD is applicable. Accordingly, deletion is justified.
-
2017 (7) TMI 1331 - ITAT VISAKHAPATNAM
Penalty u/s 271D - assessee had obtained unsecured loan from his daughter - assessee has submitted that in this case the transaction is in between father and unmarried daughter and therefore, section 269SS has no application - HELD THAT:- The entire transaction was done in between Corporation bank and his daughter Smt. P. Shilpa and in turn, the amount was received by the assessee, is a genuine transaction, the Assessing Officer has also not doubted about the transaction. We find that when assessee is carrying business for himself and on behalf of his daughter who was not yet married. For the purpose of business, assessee’s daughter obtained loan, for which assessee stood guarantor. The loan amount was received by the assessee through her daughter. It is also a fact that assessee has not paid any interest to his daughter. This transaction is only in between father and his unmarried daughter. Therefore, in our opinion, section 269SS has no application to the facts of the present case. - Decided against revenue
-
2017 (7) TMI 1329 - BOMBAY HIGH COURT
TP Adjustment - Adjustment should be LIBOR OR average yield rates considered by the learned TPO - HELD THAT:- As decided in own case [2015 (5) TMI 395 - BOMBAY HIGH COURT] the rate to be used for undertaking an adjustment should be LIBOR and not the average yield rates considered by the learned TPO.
The LIBOR rate for March 2008 was 2.6798%. However the assessee has charged 7% from its AE as per the internal CUP available. Thus, the assessee has charged interest to EKC Dubai and EKC china at the rate higher than existing LIBOR rates. Accordingly, the said transaction of providing loan to EKC Dubai and EKC China is at arm's length. Additions made by the AO are accordingly set aside - The said reasoning does not appear to be perverse. No substantial question of law arise
-
2017 (7) TMI 1327 - ITAT MUMBAI
Bogus purchases u/s 69C - assessee failed to furnish documentary evidence to prove that purchase made were genuine - AO has also added the GP @8% on the total bogus purchases - CIT(A) has applied GP margin at 5.07% and restricted the addition - HELD THAT:- We find that there are divergent views of various High Courts on what amount of GP should be applied in such bogus purchases. We find that in the case of Smith and Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] held that a trader sold some goods and he would purchase the same from other sources.
When the total sale is accepted by the AO he could not have questioned the very basis of purchase. Therefore purchases are not bogus but they are made from parties other than those who are mentioned in the books of account. This being the decision not the entire purchase price but only the profit element in such purchases can be added to the income of the assessee. Disallowance to the extent of 12.5% of such bogus purchase will be justified in the facts of this case also. Therefore, we modify the order of the CIT(A) and direct the AO to restrict the disallowance the extent of 12.5% of such bogus purchases - Appeals filed by the Revenue are allowed for statistical purposes.
-
2017 (7) TMI 1324 - ITAT CHENNAI
Assumption of jurisdiction u/s.153C - ‘Assessment of income of any other person - documents seized in search - HELD THAT:- In the present case, the income stands already returned with reference to the profit (loss) disclosed in the assessee’s operating statement (profit and loss account), found and seized in search. Also, the balance-sheet also agrees with that furnished as a part of the return of income. The opportunity provided by us to the Revenue to exhibit the AO’s satisfaction was guided primarily by the intent to find the basis thereof in-as-much as it could well be that there has been some omission in writing the satisfaction note, even as the satisfaction is otherwise discernible from the seized material itself.
It is in doubt surprising, even as observed during hearing, that the assessee’s audited accounts were found at the place of another, but that, a valid ground for making further investigation, is by itself not sufficient for invoking s. 153C, or regarding the ingredients of the said provision, as satisfied. There has been thus no valid assumption of jurisdiction for the issue of notice there-under and, accordingly, the impugned assessment, framed u/s. 143(3) r/w s. 153A, is bad in law.
It is not any seized material belonging to, but only that which has a bearing on the determination of total income of, such other person, that shall give rise to the special jurisdiction envisaged by the provision. The same only seeks to take the circumstance of the seized material found in search in respect of the assessee to its logical conclusion, without which the provision becomes open ended and, accordingly, liable to be regarded as arbitrary.
Legislative intent is to be the foundation of any interpretative exercise. Again, it cannot be lost sight of that the earlier assessment may be, as in the instant case, under verification procedure, i.e., u/s. 143(3) or u/s. 144. And, therefore, in the absence of any such caveat or condition in the provision, the ensuing assessment would only be a review, impermissible under the scheme of the Act - See M/S. KELVINATOR OF INDIA LIMITED [2010 (1) TMI 11 - SUPREME COURT] and KALYANJI MAVJI AND CO. [1975 (12) TMI 2 - SUPREME COURT] - Decided in favour of assessee.
-
2017 (7) TMI 1322 - ITAT CHENNAI
Unexplained income of assessee u/s.69 - Addition of cash deposited into savings bank account and amount deposited into current account of the assessee - HELD THAT:- Section-69 makes it clear that onus is on the assessee as regards furnishing of explanation relating to deposits, which is not recorded in the books of accounts, if any, maintained by the assessee. Where the assessee offers no explanation or where the explanation offered by the assessee is not satisfactory in the AO’s opinion, the value of the unexplained investments, the value of the unexplained investments would be treated as income of the financial year in question. Whenever explanation offered by the assessee were not fully relied upon by the Department, it cannot be said that the Department had any further burden to prove that this was an income of assessee. Where the assessee had failed to prove the source of investments to the satisfaction of the AO, the AO should be justified in treating the same as unexplained investment u/s.69 of the Act.
In the present case, the plea of assessee is that it is the part of the undisclosed turnover and being so, only GP of such to be estimated as income of assessee. The assessee, before us, was not able to show the details of the sales made by the assessee with reference to any purchase.
As rightly pointed out by the ld.D.R, all the purchases and expenditure already recorded by the assessee in its books of accounts and once the purchases and expenses were already recorded by the assessee in his books of accounts, there is no question of estimating any income. On such deposits made into bank account, the entire unaccounted deposits to be considered as unexplained income of assessee u/s.69of the Account.
Another argument that Sec.285A provides only information with regard to cash deposit into SB A/c and it does not authorize the AO to collect information with reference to current account. In my opinion, addition made by the AO u/s.69 of the Act as explained earlier. Section 69 authorizes the AO to consider unexplained deposits into bank account, whenever assessee failed to explain the source of such deposits. Being so, no infirmity in the order of lower authorities and the same is confirmed. - Decided against assessee.
-
2017 (7) TMI 1320 - ITAT DELHI
Disallowance of irrecoverable debt (TDS certificates) written off - addition on the premise that TDS recoverable from customer is not a bad debt and non receipt of TDS certificate cannot be reason for non claim of TDS credit due to appellant - whether deduction of irrecoverable TDS is not available due to non-compliance with provisions of Income tax Act, 1961 - HELD THAT:- Identical issue having similar facts was a subject matter of the departmental appeal in the case of ACIT, Circel-5(1), New Delhi Vs Kelly Services India Pvt. Ltd. [2013 (1) TMI 83 - ITAT DELHI] wherein the identical issue has been decided in favour of the assessee by observing what is material is the factors or the circumstances which cause loss & if the loss occurred during the course of carrying on the business, it is incidental to it and, hence, allowable. Admittedly, in this case, the assessee suffered loss during the course of carrying on its business therefore, same is allowable - as the issue involved is having the similar facts as involved in the case of CIT vs. Shreyans Industries Limited, the order of the CIT (A) on this issue sustained - Decided in favour of assessee.
-
2017 (7) TMI 1319 - ITAT MUMBAI
Addition u/s 68 - peak credit addition - applying 0.50% by the AO on the sales respectively - HELD THAT:- CA appointed by the CBI prepared the audit report without confronting the same to the assessee. AO issued notice u/s 133(6) to some of the debtors and creditors and most of these parties were verified by the AO. It is only in the case of three creditors that the notices issued u/s 133(6) were returned unserved.
Out of the three concerns M/s Stads Ltd was struck-off from the Register of Companies and the second concern M/s Pashupati Fabric Ltd was under liquidation before commencement of reassessment proceedings. AO has not brought to the notice of the assessee that the notices sent to these parties were returned unserved and proceeded to frame the assessment believing these parties to be non-genuine. It is also submitted that before the AO, the necessary documents could not be produced because the records were in the custody of CBI.
FAA has comprehensively considered various facts and contention of the assessee and came to the conclusion that the addition of ₹ 10,00,523/- were made on the basis of peak credit which was wrong as the assessee has fully disclosed all the transactions in its books of account.
CIT(A) also deleted the addition at the rate of 0.5% of the total sales on the ground that the assessee has fully disclosed the sales and purchases in its books of account and whatever profit or loss earned on these transactions were duly calculated and filed before the AO in the return of income. We are inclined to agree with the conclusion drawn by the CIT(A) . Accordingly , the appeal of the revenue department is dismissed.
Addition u/s 68 in respect of unsecured loans from Pashupati Fabric Ltd. - HELD THAT:- The confirmation on account was also filed before the ld.CIT(A). The ld. CIT(A) has also recorded the findings of facts that the said buyer M/s Pashupati Fabric Ltd has paid up share capital of ₹ 91,21,77,200/- and therefore, the creditworthiness of the said party was not in doubt and finally deleted the addition after examining the various documents in the paper book which proved the transaction to be genuine and the advances was adjusted in the subsequent years and thus deleted the addition. In our opinion, the order of the ld.CIT(A) on this point is very reasoned order which call for no interference on our part as the FAA has allowed the appeal of the assessee by observing that the addition by the AO was made on the wrong understanding of facts that unsecured loan was received by the assessee whereas as a matter of facts the advance were received against the sale of software which was finally supplied on 8.5.2006. We, therefore, uphold the order of he ld.CIT(A) by dismissing the ground raised by the revenue.
-
2017 (7) TMI 1318 - ITAT CHENNAI
Apportionment of royalty expenditure - CIT(A) has erred in allowing 25% of royalty payment as capital expenditure and the balance 75% as revenue expenditure - HELD THAT:- As decided in own case [2011 (2) TMI 1417 - ITAT CHENNAI] the facts of the case in hand and point at issue decided by the Hon’ble Madras High Court in the case of Southern Switchgears Ltd. as affirmed by the Hon’ble Supreme Court [1997 (12) TMI 105 - SC ORDER] and the ld. CIT(A) has followed such decision to give part relief to the assessee and no distinguishing feature has been pointed by the ld. DR in this regard.
Allowance of additional depreciation - assessee entitlement to carry forward 50% of additional depreciation in the succeeding year when the plant and machinery was put in use less than 180 days in the preceding previous year - HELD THAT:- CIT(A) has rightly followed the decision of the Tribunal in the case of Lakshmi Technology and Engineering Industries Ltd. v. DCIT [2016 (6) TMI 44 - ITAT CHENNAI] wherein as held the assessee is entitled to claim 50% of additional depreciation in the succeeding year when the plant and machinery was put in use for less than 180 days in the preceding previous year and directed the Assessing Officer to allow the additional depreciation as claimed by the assessee. Hence, the ground raised by the Revenue for both the assessment years is dismissed.
Disallowance of the marketing service fees paid to India Piston Limited - HELD THAT:- Similar facts in an identical issue in assessee’s own case for the assessment years 1999-2000, 2003-04 to 2005-06 [2011 (2) TMI 1417 - ITAT CHENNAI] as held IP Rings Ltd. does not have any market set up in its own and when specifically pointed out that there is already clause in the agreement for payment technical consultancy fee payable at 5%, the assessee’s counsel asserted further that there was a dire need for such expenditure and it has been used for launching of the new product without which the assessee could not appropriately market the new product. But, when asked to supply certain data in details about judgment and other details, the assessee was unable to do so. We are inclined to concur with the conclusion as drawn by the ld. CIT(A), who is found to have considered each and every aspect of the issue before arriving at the conclusion drawn by him when no contrary material has been provided by the assessee in this regard and dismiss this ground of appeal
-
2017 (7) TMI 1315 - ITAT DELHI
Assessment u/s 153A - whether there was no incriminating material and assessments for the assessment years under consideration were not abated? - HELD THAT:- CIT (Appeals) has held that in absence of incriminating material found during the course of search and in absence of abetment of assessment on the date of search, the additions made under section 153A of the Act is not sustainable. In absence of rebuttal of these findings of the CIT (Appeals), the addition made by the Assessing Officer cannot be sustained.
The audit report directed during the course of assessment proceedings in the case of Dharampal Satyapal Ltd., in our view, cannot be treated as incriminating material found during the course of search to justify the addition made in the assessment under section 153A. It is also not the case of the Revenue that on the date of search assessments in the case of assessee were abetted. We thus, respectfully following the ratio laid down in the above cited decision of the Hon’ble jurisdictional High Court of Delhi in the case of CIT Vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] hold that the ld. CIT (Appeals) was justified in deleting the addition made by the Assessing Officer in the assessment framed under section 153A - Decided in favour of assessee
-
2017 (7) TMI 1314 - ITAT PUNE
TPA - comparable selection - exclusion of concern FCS Software Ltd. from the list of comparable companies - HELD THAT:- Segmental accounts were not available. Secondly, the said concern cannot be selected as comparable because of the filters applied by the TPO himself in selecting the concerns; one of the filters was companies with income from IT services more than 50% of the operating revenue or segmental revenue were to be selected. However, the said company had earned 42% of its total revenue from providing software services and applying the filter selected by the TPO, the said concern is to be excluded from the final list of comparables. Accordingly, we uphold the order of CIT(A) and dismiss the ground of appeal No.1 raised by the Revenue.
Exclusion of Infosys Technologies Ltd. and L&T Infotech being not comparable for not fulfilling the filter of turnover and also the brand - As relying on TIBCO SOFTWARE INDIA PVT. LTD. VERSUS THE DY. COMMISSIONER OF INCOME TAX, CIRCLE – 7, PUNE AND VICE-VERSA [2017 (1) TMI 1574 - ITAT PUNE] we uphold the order of CIT(A) in excluding Infosys Technologies Ltd. and L&T Infotech Ltd. from the final list of comparables, wherein the said concerns were product companies and functionally not comparable. Further, the said concerns are not comparable because of high turnover, as against the assessee having very low turnover in the field of provision of software services. Accordingly, the ground of appeal No.2 raised by the Revenue is dismissed.
-
2017 (7) TMI 1313 - SC ORDER
Exemption u/s 11 - charitable activity u/s 2(15) or not? - HELD THAT:- Delay condoned.
Leave granted. Pleadings be completed within four weeks.
-
2017 (7) TMI 1312 - ITAT PUNE
Taxability of gains on the sale of land - nature of land sold - reliance of evidence 7/12 extract furnished by the assessee - HELD THAT:- CIT(A) after considering various case laws cited in the order has given a finding that the 7/12 extract furnished by the assessee indicated that the land that was sold by assessee is irrigated and cultivated and various crops were grown and the grass was also grown and utilized as animal feed. Assessee also submitted that the sales receipts of the mangoes sold in the market and since the income was more than the expenditure incurred, it was not shown in the income tax return. He has further given a finding that the position of other agricultural lands is reflected in the balance-sheet filed by the assessee.
He has further given a finding that assessee with the help cogent and reliable evidences has been able to prove that the land was used for agricultural purpose and agricultural operations were also carried out in the said land since 1993. He has further noted that the observation of AO regarding non-agricultural operations carried on the said lands was not correct in the light of the evidence 7/12 extract furnished by the assessee. Before us, the Revenue has not placed any material to controvert the findings of CIT(A) nor pointed out any fallacy in the findings of CIT(A). We therefore find no reason to interfere with the order of CIT(A). Thus, the grounds of Revenue are dismissed. - Decided against revenue.
-
2017 (7) TMI 1311 - ITAT CHENNAI
Addition being the gift said to be received from her mother - genuineness of transaction and capacity of the assessee’s mother to gift - assessee’s mother appears to be housewife - HELD THAT:- For the purpose of proving a cash credit, the assessee has to necessarily establish the identity, creditworthiness of creditors and genuineness of transaction. In this case, the identity of the creditor is not in dispute. The genuineness of transaction was also established by filing an affidavit from the donor, namely, the assessee’s mother. At the best, the AO can doubt the creditworthiness of creditor. The assessee’s mother claims that gift was given from her past savings. The Assessing Officer disbelieved the gift because she has no independent source of income and she was not assessed to tax.
The assessee’s mother appears to be housewife. She has to take care of household expenses. Whenever received money from husband or son for household expenses, Indian ladies use to save part of the money and whenever the husband or son urgently needs some money, the ladies use to give the same out of their savings. This saving habit of housewives in this country, more particularly, in southern part of country, cannot be ignored by the AO.
When the assessee’s mother claims that she saved money given for household expenses and filed an affidavit before the Assessing Officer, this Tribunal is of the considered opinion that the claim of the assessee’s mother cannot be brushed aside so lightly without examining it. The assessment year under consideration is 2013-14. Even a mason or construction worker is receiving salary of ₹ 400 to 500 per day. In this economic situation, there is no reason to doubt the capacity of the assessee’s mother to give ₹ 5,05,000/- to the assessee. Tribunal is of the considered opinion that all the ingredients which are necessary for proving the gift were established by the assessee. Therefore, the CIT(Appeals) is not justified in confirming the addition.
TDS u/s 194C - Disallowance of freight charges paid to the contractors - assessee contends that the payment was a composite one for purchase of iron ore and transportation, therefore, not liable for deduction of tax - HELD THAT:- The fact remains that the Permanent Account Number was furnished by the assessee except in respect of payment made to the extent of ₹ 44,30,887/-. Moreover, it is not in dispute that the payment made by the assessee is composite one for iron ore and transport of the same. Therefore, the CIT(Appeals) has rightly restricted the disallowance at ₹ 44,30,887/-. Hence, the same is confirmed.
Addition on account of closing stock - CIT(Appeals) after considering the alternate working filed by the assessee, allowed the claim without giving any opportunity to the Assessing Officer - HELD THAT:- Rule 46A of the Income-tax Rules, 1962 clearly says that whenever additional evidence is filed by the assessee, an opportunity shall be given to the Assessing Officer to contradict the same. Since such an opportunity was not given, this Tribunal is of the considered opinion that the Assessing Officer has to reconsider the entire issue. Accordingly, the orders of the lower authorities are set aside and the issue of closing stock is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue in the light of the material that may be filed by the assessee before him, in accordance with law, after giving a reasonable opportunity to the assessee.
Addition being the investment made in Multi Commodity Exchange - CIT(Appeals) deleted the addition without any material - HELD THAT:- When the transaction was not ascertainable in Multi Commodity Exchange by citing Permanent Account Number, it is not known how the assessee claims that someone has used her Permanent Account Number. If really PAN was misused by someone, then we have to examine who has invested the money in Multi Commodity Exchange and who enjoyed the profit of the transaction made. Therefore, the CIT(Appeals) is not justified in deleting the addition on the ground that the addition was made on surmise. Hence, the matter needs to be reconsidered. Accordingly, the orders of the lower authorities are set aside and the addition of ₹ 5 lakhs is remitted back to the file of the AO - AO shall re-examine the issue in the light of the material that may be filed by the assessee and thereafter decide the same in accordance with law, after giving a reasonable opportunity to the assessee.
-
2017 (7) TMI 1308 - ITAT CHENNAI
Expenditures for securing the title of the land - AO disallowed the said expenditure holding that the land was already the assessee company property would not suffice in so far as having possession of the immovable property is one thing but having a clear title more so an unencumbered title in respect of the said immovable property is what increases the value of the property - HELD THAT:- The expenditure incurred by the assessee is clearly for extinguishing third party rights and clearing of getting proper and clear title of the immovable property. This being so, as the Revenue has not been able to dislodge any of the findings of the facts as arrived at by the Ld.CIT(A), we find no good reason to interfere with the order of the Ld.CIT(A). In these circumstances, the appeal filed by the Revenue stands dismissed.
-
2017 (7) TMI 1306 - ITAT AHMEDABAD
Cooperative Development Expenses allowability - Disallowance being assistance given to JKMPC Ltd. - whether such expenditures are wholly and exclusively for the purpose of business, it does not give any enduring benefit? - HELD THAT:- Expenditure incurred by way of assistance to Jammu & Kashmir Milk Producers' Co-operative Limited are not at all of capital in nature or of any benefit enduring nature. The same are incurred in the normal course of business activities and in furtherance of milk and Amul products. The expenditures are incurred wholly and exclusively for the purpose of business. The decision cited above in case of Valsad District Co.op. Society [2011 (1) TMI 1526 - ITAT AHMEDABAD] in the ratio decided therein is fully applicable to Appellant's case, we therefore, hold that the expenditure incurred of ₹ 150 lakhs being the expenditure incurred as assistance to Jammu & Kashmir Milk Producers' Co-operative Limited are of revenue in nature and same be allowed. - Decided in favour of assessee
Depreciation of Amul Parlour at 10% as against 100% depreciation claimed by the Appellant - HELD THAT:- Matter was decided in favour of assessee by the Hon'ble ITAT in assessee's own case for A.Y.2002-03 [2010 (3) TMI 1246 - ITAT AHMEDABAD] and now the same has been confirmed by the Hon'ble Gujarat High Court in assesses own case [2014 (2) TMI 31 - GUJARAT HIGH COURT] as held hats milk dairy procure land on lease basis and constructed temporary sheds for sale of milk products and Hon'ble High Court has also cited similar decision in the case of CIT vs. TVS Lean Logistics Ltd. [2007 (6) TMI 44 - HIGH COURT, MADRAS] and held that construction of building on a leasehold land resulted into assessee only a business advantage and the assessee cannot be stated to have acquired any capital asset.
Disallowance of expenditure of Director's visit to various Dairy plants - AO disallowed the expenditure being incurred by the Directors of this co-operative society on the ground that they are not incurred for the purpose of business - CIT (A) confirmed the disallowance in his order holding that Directors visited the plant at Jammu & Kashmir from which the Appellant is getting the Pouch Milk and held that assessee could not explain how the visit of Directors at Plant of Jammu & Kashmir was manifested to the assessee and how it is concerned that the standard of Plant of Federation, which is situated in different States - HELD THAT:- Once we have held that the expenditure incurred by the Assessee for dairy development incurred to assist JKMPC Ltd. is revenue expenditure, then the expenditure incurred by the Directors of the cooperative society are also akin to the business of the society. There is no element of any capital expenditure incurred therein. The expenditure incurred accordingly are allowed as revenue expenditure. This ground of Appeal is accordingly allowed.
Addition on account of reimbursement of member unions against Co-op. Development Expenses - HELD THAT:- A.O. heavily relied on his argument that these are part of the dairy development expenditure and reiterated that the expenditure are fully covered by the decision of Ahmedabad ITAT in the case of Valsad District Co-Op. Society [2011 (1) TMI 1526 - ITAT AHMEDABAD] . In view of this, we held that the expenditure of ₹ 124.60 lakh incurred on account of emoluments of member unions are allowed as revenue expenditure. The Appeal of the Revenue is dismissed accordingly.
Disallowance of Amul Yatra Expenses - business expenditure - HELD THAT:- We hold that the expenditure incurred on Amul Yatra is incurred by the appellant for business purpose, the same is part and parcel of the dairy development expenditure incurred in normal course of business. In view of this, the expenditure incurred by the appellant are allowable expenditure. This ground of Appeal of Revenue is dismissed.
Nature of expenses - expenditure claimed as repair to the damage caused to the plant - revenue or capital expenditure - HELD THAT:- Expenditure incurred is to restore and repair the existing plant and commissioning the same which was stopped due to heavy damage. The fact that in subsequent year insurance receipt has been taxed as revenue income is also confirmed in the statement of income filed for A.Y.2008-09. Once the assessee and department have taken a view that insurance claim received on the damage of one big plant is a revenue income, the corresponding expenditure incurred towards such insurance claim for replacement and repair, expenditure incurred of ₹ 87 lakh has to be treated as revenue in nature. Particularly relying on the decision of CIT vs. Saravana Spinning Mills Limited [2007 (8) TMI 16 - SUPREME COURT] . The Assessee's appeal, accordingly allowed considering the expenditure of ₹ 87 lakhs as revenue
Allowable revenue expenditure - Expenditure on Dairy Development are wholly and exclusively for the purpose of business and therefore are allowable as revenue expenditure - various expenditures incurred in form of Co. Op. Development expenses are not at all of capital in nature or of any benefit enduring nature. The same are incurred in the normal course of business activities and in furtherance of milk and Amul products. The expenditures are incurred wholly and exclusively for the purpose of business - Assessee appeal allowed.
-
2017 (7) TMI 1302 - ITAT DELHI
Disallowance of interest in respect of security deposit - HELD THAT:- A decided in assessee's own case [2016 (9) TMI 1336 - ITAT DELHI] we do not agree with the finding of the CIT(A) to the extent of confirmation of the addition partly merely because reconciliation in these accounts with respect to the live connections are pending. The observation of the CIT(A) is also not correct that assessee submitted that this amount is under reconciliation and to that extent such credits are not fully explained. Before him assessee submitted that it is under reconciliation.
Further when the character of deposit is determined, looking to the nature of operation geographically as well as large subscriber’s base, it is not correct to hold that pending reconciliation the deposit become income of the assessee. In view of this we set aside this issue back to the file of the Assessing Officer to give proper opportunity to the assessee to provide reconciliation of the same and then if the amounts are not at all identifiable with respect to the customers then to that extent addition may be restricted. - Decided in favour of assessee for statistical purposes.
Disallowance u/s 14A - HELD THAT:- The factual finding of the ld. CIT(A) that the assessee has not borrowed any loans and therefore no interest has been paid on account of such borrowings could be controverted by the ld. DR. We find the interest expenditure incurred by the assessee company is on account of interest paid on security deposits received from the customers, interest on GPF and interest paid to the Municipal Authorities, Mumbai. We further find from the various details furnished by the assessee in the paper book that sufficient funds are available with the assessee which are much more than the investments made during the year. Therefore in view of the decision of Hon’ble Mumbai High Court in the case of CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] order of Ld. CIT(A) in our opinion is fully justified. Since the Ld. CIT(A) has given justifiable reasons as to why provisions of Rule 8D and 14A are not applicable to the facts of the present case, and since the Ld.DR could not point out any infirmity in the order of the Ld. CIT(A), therefore, we do not find any infirmity in the order of the same.
Disallowance of interest on customers deposit accounts - HELD THAT:- We find identical issue had come up before the Tribunal in assessee’s own case in A.Y. 2006-07 and the ground raised by the revenue was dismissed by The Tribunal as held subscriber’s deposit held to be payable by the assessee to the subscriber on termination of services to the extent of reconciled amount and therefore, it cannot be added to the income of the assessee specially in view of the assessee furnishing substantial details and reconciliation of the amount outstanding. Further the amount of interest related to that deposit is also deleted by the ld CIT(A) as the interest was payable with respect to subscriber deposit which is completely reconciled.
Understatement of income due to changes in the accounting policy - CIT-A deleted the addition - HELD THAT:- We find the assessee company during the year under consideration has changed its accounting policy for valuation of inventory of stores and spare parts and has adopted a new policy for valuation of intangibles. With regard to valuation of inventory of stores and spares, we find the assessee has changed its accounting policy to value the inventory at cost or net realisable value, whichever is lower. With regard to valuation of intangibles, we find the assessee has introduced new accounting policy whereby it has been specified that the intangible assets will be capitalised when they are ready to use. The changes in accounting policy adopted by the assessee in our opinion are in line with the AS notified by ICAI, and this fact has also not been controverted by the A.O. It is an accepted fact that revenue cannot pick and choose and make additions or disallowances in part. In detailed reasoning given by the CIT(A) on this issue, we do not find any infirmity in his order on this issue. - Revenue appeal dismissed.
-
2017 (7) TMI 1300 - PUNJAB AND HARYANA HIGH COURT
Stay of demand exceeding 365 days - HELD THAT:- It was not disputed by the learned counsel for the appellant revenue that the matter in issue is no longer res integra and stands concluded by the decision of this Court in M/S CARRIER AIR CONDITIONING AND REFRIGERATION LIMITED [2016 (5) TMI 396 - PUNJAB AND HARYANA HIGH COURT] wherever the appeal could not be decided by the Tribunal due to pressure of pendency of cases and the delay in disposal of the appeal is not attributable to the assessee in any manner, the interim protection can continue beyond 365 days in deserving cases.
........
|
