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Income Tax - Case Laws
Showing 21 to 40 of 735 Records
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2019 (9) TMI 1686 - ITAT HYDERABAD
TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee's software development services need to be deselected.
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2019 (9) TMI 1685 - ITAT AHMEDABAD
Deduction u/s 35(1)(ii) - expenditure incurred towards donation - assessee is the beneficiary of such bogus donation - rejection of claim of benefit of donation was made on the ground that by and under a notification being No. 79/2016 dated 06.09.2016 issued by CBDT the approval granted to such foundation has been withdrawn - HELD THAT:- The issue is squarely covered by and under several judgments passed by the Co-ordinate Bench including one of Thakkar Govindbhai Ganpatlal (HUF).2019 (7) TMI 1559 - ITAT AHMEDABAD] The said appeal preferred by the Revenue was rejected on the basis of the judgment passed in the matter of S. G. Vat Care Pvt. Ltd. [2019 (1) TMI 1694 - ITAT AHMEDABAD] passed by the Co-ordinate Bench in the identical issue.
Since the donation has not been doubted by the Revenue in the case of the assessee, in the absence of any changed circumstances, respectfully relying upon the judgment passed by the Co-ordinate Bench we allow the appeal preferred by the assessee. Consequentially, the addition made by the authorities below is deleted. - Decided in favour of assessee.
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2019 (9) TMI 1684 - ITAT DELHI
TP adjustment - adjustment on account of the interest on loan - bench marking of the interest on loan at US LIBOR - DRP held the interest at US LIBOR Plus 500 basis points - assessee arguing that the mark up of 500 basis points added to the LIBOR is not justified, since entities are under the same management and control, which reduced the risk factors - HELD THAT:- There is no dispute that the assessee advanced the interest free loan to its wholly owned subsidiary. In the first round of litigation, TPO reckoned the notional interest as per PLR and was confirmed by the Ld. DRP. In the second round of litigation TPO bench marked the interest on loan at SBI PLR plus 300 basis points, whereas, Ld. DRP, while following their own finding for the AY 2002-03 made it US LIBOR plus 500 basis points. It is not the case of the assessee that the facts involved in the matter are different from those involved for the AY 2002-03. It is not the case of the assessee that the findings of the Ld. DRP for the AY 2002-03 are in any way disturbed in any subsequent proceedings.
Thus LIBOR with mark up cannot be found fault with, having regard to the facts of the case of the assessee. However, we find that the mark up of 500 basis points to the US LIBOR appears to be unjustifiable. We consequently, accept the alternate plea of the assessee and find that the bench marking of the interest on loan at US LIBOR plus 170 basis points would meet the ends of justice, and, accordingly, direct the Ld. TPO to recompute the notional interest at US LIBOR plus 170 basis points. Appeal of the assessee Allowed in part.
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2019 (9) TMI 1683 - ITAT PUNE
Disallowance u/s 40(a)(i) - re-characterizing the reimbursement of expenses paid by assessee to its associated enterprise as royalty - disallowing the said claim u/s 40(a)(i) of the Act for non deduction of tax at source - HELD THAT:- First of all, the said payment has been made by assessee to the entities in earlier years also and no disallowance whatsoever has been made either by AO or TPO in this regard. Assessee before us has produced assessment orders / TPO’s orders for the earlier years. Further, as far as the nature of payment is concerned, wherein the assessee has filed necessary documentation before the authorities below and even before us, it cannot be said that reimbursement of expenses for leaseline are in the realm of royalty and section 9 of the Act or Article 12 of DTAA is attracted. First of all, we observe that since there is no amendment to the provisions of DTAA and same being beneficial, would be applicable and the payment made by assessee cannot be held to be royalty.
Payment of leaseline charges is not equipment royalty. Vide para 101, it was further held that where it is case of reimbursement of expenses, there is no requirement to deduct tax at source.
Hon'ble Supreme Court also in DIT (IT) Vs. A.P. Moller Maersk A S [2017 (2) TMI 993 - SUPREME COURT] and BNP Paribas SA [2018 (3) TMI 1987 - BOMBAY HIGH COURT] have held that when it is case of reimbursement of expenses, then there is no requirement of deduction of tax from such payments. Accordingly, we hold that there is no merit in the orders of authorities below in holding the assessee liable for such non deduction of tax at source. Reversing the same, we allow the claim of assessee and disallowance made under section 40(a)(i) of the Act is thus, deleted. The ground of appeal No.2 raised by assessee is thus, allowed.
Unabsorbed depreciation in the hands of assessee - HELD THAT:- As assessee pointed out that the same was consequential to the decision in earlier years. So, we direct the Assessing Officer to verify the plea of assessee in this regard and re-work the unabsorbed depreciation to be adjusted against current year’s income.
Assessee pointed out that there is double disallowance made by AO, that there are no brought forward losses of earlier years and credit for the same cannot be allowed merely because the assessee had contested the additions in appeal before the Tribunal. We direct the Assessing Officer that in case there is some relief given by the Tribunal in earlier years, effect of the same may be allowed to re-compute the unabsorbed depreciation in the hands of assessee. The ground of appeal No.3 is thus, allowed.
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2019 (9) TMI 1679 - ITAT DELHI
TP Adjustment - Selection of MAM - rejection of the Cost Plus Method (CPM) adopted by the assessee as the Most Appropriate Method for determination of the Arm’s Length Price (ALP) and applying TNMM as the Most Appropriate Method with OP/TC as PLI - HELD THAT:- In the absence of any change in the facts and circumstances of the case, we are of the considered opinion that the rule of consistency demands that the consistent view has to be taken. We, therefore, while respectfully following the decision of the Hon’ble Apex Court in the case of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] accept the consistent view taken in assessee’s own case for the earlier as well as the subsequent year and hold that CPM is the most appropriate method for the determination of ALP in this case. In view of this conclusion reached by us, it is not necessary to consider the suitability of M/s Kerala Travels Interserve Ltd. Grounds of appeal of the assessee are allowed accordingly. Appeal of the assessee is allowed.
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2019 (9) TMI 1677 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- Exclusion of companies as functionally not comparable with captive service provider.
Non treating provision for doubtful debts, provision for warranty is, provision for doubtful deposits as operating expenses - AR contends that Ld. AO while computing margins of the comparables has not included certain provisions - HELD THAT:- Wedirect Ld. AO to compute the provisions claimed in case of comparables by considering those which pertains to the year under consideration.
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2019 (9) TMI 1676 - ITAT MUMBAI
Rectification of mistake - order giving effect to the order of third member u/s 254(1) - HELD THAT:- As question no. 1 is decided in terms of the view taken by the Third Member concurring with the Judicial Member. Therefore, the majority view is confirmed. The Miscellaneous Application of the assessee on this issue is allowed.
Second question referred to the Third Member, the Third Member has again concurred with the view taken by the Judicial Member as held not following the amended order, particularly when such amended order has been duly brought to the notice of the adjudicating authority/court during the relevant proceedings, definitely constitutes a mistake apparent from record. The factum of the amended order having been brought on the record before the adjudicating authority renders the record of that authority to include the amended order. The amended order thus becomes a part of the record of the adjudicating authority and not following that amended order is none other than a mistake apparent from record.
Since the Third Member concurred with the view taken by the Judicial Member, the majority view is confirmed. On this issue also, the Miscellaneous Application of the assessee is allowed.
Miscellaneous Application filed by the assessee is allowed.
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2019 (9) TMI 1673 - ITAT DELHI
Unexplained advertisement expenses - Addition u/s 69C - Addition made as certain parties did not respond to inquiries made by the AO u/s 133(6) - HELD THAT:- The mere fact that certain parties did not respond to inquiries made by the Assessing Officer under Section 133(6) of I.T. Act; is not, by itself, sufficient to warrant addition of expenses in connection with which the inquiries were made U/s 133(6) of I.T. Act. For our aforesaid view, we take additional support from orders of CIT vs. Continental Carbon India Ltd. [2012 (6) TMI 712 - DELHI HIGH COURT] and CIT vs. GP International Ltd. [2009 (12) TMI 33 - PUNJAB AND HARYANA HIGH COURT] as held by Hon’ble High Court that merely because some of the persons did not respond to the notice issued by the Assessing officer U/s 133(6) of the I.T. Act, it cannot be taken that the said transaction was ingenuine - Decided in favour of assessee.
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2019 (9) TMI 1668 - CALCUTTA HIGH COURT
Nature of receipt - sales tax incentives received - allowability of capital receipt - whether incentive was received after commencement of production, not utilised for acquisition of plant and machinery? - additional depreciation i.e. 50% is allowable in subsequent assessment year - HELD THAT:- Appeal admitted on the substantial questions of law:
1. Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal, “A” Bench, Kolkata erred in law in holding that sales tax incentives of Rs. 12.38 lakhs received during the period was capital in nature without considering the fact that the incentive was received after commencement of production, not utilised for acquisition of plant and machinery?
2. Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal, “A” Bench, Kolkata erred in law in holding that balance additional depreciation i.e. 50% is allowable in subsequent assessment year?
As the respondent is represented by learned counsel, issuance and service of notice of appeal are dispensed with Let informal paper books be filed by learned advocate-on-record for the appellant by 22nd November 2019 2019, serving a copy thereof upon the advocate-onrecord for the respondent at least seven days before the date of hearing of the appeal.
List the appeal for hearing on 4th December 2019.
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2019 (9) TMI 1664 - ITAT BANGALORE
TP Adjustment - comparable Companies selection - HELD THAT:- In facts of present case, assessee is doing part of software development cycle and therefore has been categorised as a captive software development service provider catering to needs of the group. Assessee in TP study held to be comprise of Software Engineers, who develop project based on inputs received from AE.
Engineers employed by assessee designs functional specifications for the project identification of interfaces components coding and bug fixing. Ultimate approval and owner of project developed is the AE. In our view, by involving itself in process of Software development for AE, assessee cannot be held to be fulfledged Software Development Company. One has to look into transaction in regards to services rendered and FAR, which catagorises it to be a captive service provider, working on business model of cost plus margin.
It is observed that comparables sought to be excluded are 100 % Software Development Companies, having high turnover and therefore respectfully following aforestated view in case of Genesis Integrating Systems India Pvt. Ltd., [2011 (8) TMI 952 - ITAT BANGALORE] these comparables are to be excluded on both the counts of functionally not being similar with that of assessee and also because they have a high turnover of more than 200 crore. For assessment year 2009-10, excluded these companies following Genesis Integrating systems Indi Pvt. Ltd vs. DCIT [2011 (8) TMI 952 - ITAT BANGALORE]
Reliance has been placed on decision of this Tribunal in case of Autodesk India Pvt.Ltd. [2018 (7) TMI 1862 - ITAT BANGALORE] followed similar view to exclude identical comparables by applying turnover filter, wherein all the decisions relied upon by Ld. CIT DR has been considered and dealt with.
Therefore, respectfully following above decisions, we uphold exclusion of Infosys Ltd, Larsen & Toubro Infotech Ltd., and Persistent Systems Ltd., by Ld. CIT (A) from final list.
Now coming to Zylog Systems Ltd., Mindtree Ltd. held that, turnover is a relevant criteria for choosing companies as comparables for determining ALP of international transaction.
Even otherwise, all above referred comparables are functionally not similar with that of assessee, which is only a captive software development service provider, which does not design/develop/sell software products and does not own any IP. We therefore uphold exclusion of this comparable is by Ld. CIT (A).
Disallowing depreciation as an adjustment in comparables - For assessment year 2005-06 in assessee’s own case when this issue was remanded by this Tribunal is Ld.TPO/AO had inter alia granted the adjustment on depreciation after taking into consideration the detailed working submitted by assessee and held that instead of allowing any adjustment on this account, the AO is directed to compute the margin in respect of the comparables after excluding the depreciation from the cost and also in the case of the appellant the depreciation to be excluded from the cost for computing the arm’s length difference. The appeal on the above issue is disposed accordingly.
TDS u/s 194J - disallowance under section 40 (a) (ia) - not deducting tax at source at the time of purchase of software - HELD THAT:- This issue stands settled against assessee is by decision of this Tribunal in case of DCIT vs WS Atkins India Pvt.Ltd. [2015 (11) TMI 917 - ITAT BANGALORE] and Kawasaki Microelectronics Inc [2015 (9) TMI 9 - ITAT BANGALORE]
Disallowance u/s 14 A read with Rule 8D - HELD THAT:- As submitted that there is no exempt income earned by assessee during year under consideration. Both parties admittedly submitted that, issue stands squarely covered by decision of Hon’able Delhi High Court in case of Cheminvest Ltd vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT]
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2019 (9) TMI 1663 - ITAT CHENNAI
Depreciation claimed on brand value - AO disallowed depreciation on the brand value due to the fact that no cost has been incurred to acquire brand value - As submitted that petitioner had got strong prime facie case in its favour since depreciation on the brand value is intangible asset eligible for depreciation - HELD THAT:- From the perusal of the assessment order, it is clear that the AO had disallowed depreciation citing that no cost was incurred in acquisition of intangible asset namely brand value.
It appears that the issue in the present appeal is covered against the assessee company by the decision of Co-ordinate Bench of the Tribunal in the case of RMKV Fabrcis. [2019 (4) TMI 2072 - ITAT CHENNAI] - Therefore, the submissions made on behalf of the petitioner that there is strong prime facie case in favour of the petitioner cannot be accepted. The petitioner had not made out any case satisfying other two factors namely balance of convenience and financial hardship. It is settled position of law that Tribunal or Court cannot grant stay of demand if the assessee fails to satisfy any of the factors enumerated above. We are not inclined to grant stay of demand and accordingly, the stay petition filed by the assessee stands dismissed.
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2019 (9) TMI 1662 - ITAT MUMBAI
TDS u/s 195 - disallowing expenditure representing remittance to a foreign concern by invoking Sec. 40(a)(i) on the ground that the requisite tax has not been deducted at source - whether the payments made by the assessee to Tekla Finland would constitute 'Royalty' as per the provisions of Sec. 9(1)(vi) of the Act and/or under the provisions of India-Finland Double Taxation Avoidance Agreement which governs the recipient of income? - HELD THAT:- Additional evidence now sought to be produced by the assessee does not enable the assessee to make out a new case but only would enable the assessee to support its assertions made before the authorities in an appropriate manner. Not only that, the Additional evidence will also enable Income tax authorities to determine the correct nature of the payments in accordance with the extant position of law.
The assessee has consistently been asserting that the Re-seller agreement is merely a back to back arrangement whereby assessee distributes the software products developed by its holding company. In fact the emphasis by the AO of the Re-seller agreement would be suspect to treat payments in the nature of royalty, if factually assessee is able to demonstrate that it has not undertaken any separate development in the software products on its own in the course of selling the product to the customer. Be that as it may, in our considered opinion, the aforesaid Additional evidence is germane and in the interest of justice it deserves to be considered while determining the tax liability of the assessee, qua the impugned payments. Of course, the said evidence was not before the lower authorities and, therefore, we deem it fit and proper to remit the matter back to the Assessing Officer, who shall revisit the controversy after considering the submissions put forth by the assessee and as per law. Thus, on this aspect assessee succeeds for statistical purposes.
Disallowance towards foreign exchange loss on account of restatement of trade receivables/ payables on the end of the year - HELD THAT:- AO as well as the CIT(A) disallowed the claim on the ground that it was a contingent liability. In this context, the Ld.Representative for the assessee relied upon the judgment of the Hon'ble Supreme Court in the case of CIT vs. Woodward Governor India Private Limited [2009 (4) TMI 4 - SUPREME COURT] to contend that loss was allowable as an expenditure in computing the total income. Our attention has also been drawn to the judgment of Vassantram Mehta & Co. [2015 (5) TMI 269 - BOMBAY HIGH COURT] wherein it has been held that the loss incurred on account of fluctuation in foreign exchange rate was allowable on the date of making of balance sheet and its allowability could not be postponed to a future date. In view of the aforesaid precedents, we find that the claim of the assessee is justified and it is ordered to be allowed. Thus, on this aspect assessee succeeds.
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2019 (9) TMI 1651 - ITAT CHENNAI
Revision u/s 263 by CIT - Re-assessment order to be set aside as the AO had failed to consider and examine the relevant clauses of the agreement between the M/s. A.R. Rahaman Foundation and M/s. LEBARA Ltd., which clearly establishes that the assessee had received the remuneration towards his professional services - whether or not the Principal Commissioner of Income Tax had justified in exercising the jurisdiction of revision u/s.263 of the IT Act? - HELD THAT:- Admittedly, this issue was examined by the AO during the course of the re-assessment proceedings and took a view that the contributions made by M/s. LEBARA Ltd., are not taxable in the hands of the assessee since the same were assessed to tax in the hands of M/s. A.R. Rahaman Foundation. It is a matter of record that even the Ministry of Home Affairs, Government of India, had accorded post facto approval in respect of this contribution.
There is nothing on the record suggesting that it is taxable in the hands of the assessee. In these circumstances, we are of the considered opinion that the re-assessment order cannot be held to be erroneous and prejudicial to the interest of Revenue so as to enable the Ld. CIT(A) to exercise the power of revision u/s.263. Therefore, the Principal CIT was not justified in exercising the power of revision u/s.263. Appeal of assessee allowed.
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2019 (9) TMI 1650 - ITAT DELHI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non striking or irrelevant portions - as argued at the time of levy of the penalty the order u/s 271(1)(c) clearly show that the “assessee has furnished inaccurate particulars of income‟ in the first para of the penalty order and in the 3rd para of penalty order it is stated that the “assessee has concealed the particulars of income - HELD THAT:- In the show cause notice issued by the learned assessing officer u/s 274 read with section 271 (1) (c) none of the twin charges for initiating the penalty proceedings were struck off. Further, in the assessment order the penalty is initiated in the last para of the assessment order stating that the assessee has concealed the particulars of income and also submitted inaccurate particulars of its income. In the penalty order also at various paragraphs there is inconsistency with respect to the nature of default committed by the assessee. In paragraph number 1 the AO stated that assessee has furnished inaccurate particulars of his income. In paragraph number 3 AO states that assessee has concealed the particulars of income. In paragraph number 4 the AO states that the penalty is initiated for furnishing inaccurate particulars of income.
We are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Even the AO has failed to apply his mind at the time of recording satisfaction at the time of framing assessment to initiate the penalty proceedings u/s 271(1)(c) of the Act as to under which limb of section 271(1)(c) i.e. for concealing particulars of income or furnishing inaccurate particulars of such income, penalty proceedings have been initiated rather written vague and ambiguous satisfaction recorded throughout the assessment order as well as penalty orders. - Decided in favour of assessee.
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2019 (9) TMI 1649 - CHHATTISGARH HIGH COURT
Maintainability of appeal on low tax effects - as argued tax case [2019 (5) TMI 1944 - CHHATTISGARH HIGH COURT] dismissed applying the Central Board Direct Taxes (in short “the CBDT”) circular dated 11.07.2018 whereby the CBDT has directed that the Department Appeals may be filed on merits before the Income Tax Appellate Tribunal, High Courts and SLPs/Appeals before the Supreme Court keeping in view the monetary limits for the High Courts.
HELD THAT:- Applying the circular, the tax case was dismissed however, the same circular also says that when the issue falls within the exception clause, the same shall not be hit by the monetary limit. Referring to clause 10(e) of the circular, it is argued that where the addition is based on information received from external sources, the exception clause would apply and the ceiling of monetary limit would not apply.
Having heard learned counsel for revenue and having seen the subject clause 10(e), it appears the same would apply where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). In the case at hand the information on the basis of which this MCC has been filed was received from the Department of Sales Tax of the State of Maharashtra. Thus, the said information having not emanated from the CBI/ ED/ DRI/ SFIO/ DGGI, clause 10(e) would have no application.
In our considered view, the TAXC was rightly dismissed being hit by the Circular dated 11.7.2018 read with the amendment in the said circular vide subsequent CBDT circular dated 20.08.2018.
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2019 (9) TMI 1648 - ITAT MUMBAI
Estimation of income - Bogus purchases - CIT-A sustaining 12.5% disallowance - HELD THAT:- It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from honourable jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (2014 (7) TMI 559 - BOMBAY HIGH COURT)
In this case the honourable High Court has upheld hundred percent allowance for the purchases said to be bogus when sales are not doubted. However in that case all the supplies were to government agency. In the present case the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. As regards the quantification of the profit element embedded in making of such bogus/unsubstantiated purchases by the assessee, we find that as held by honourable High Court of Bombay in its recent judgement in the case of principle Commissioner of income tax versus M Haji Adam & Co 2019 (2) TMI 1632 - BOMBAY HIGH COURT, the addition in respect of bogus purchases is to be limited to the extent of bringing the gross profit rate on such purchases at the same rate as of other genuine purchases. - Appeal of assessee allowed.
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2019 (9) TMI 1646 - ITAT CHENNAI
Disallowance u/s 14A and Rule 8D(2)(i),(ii) & (iii) - sufficiency of own funds - HELD THAT:- We find that the assessee has own fund much above amount made investments in shares even by excluding the capital reserve and revaluation reserve. Therefore it is obvious that the entire investment made by the assessee of Rs.64,42,600/- is from its own interest free funds. In such situation, it will be incorrect to apply Rule 8D(2)(i) & (ii) of the Rules in the case of the assessee, because the assessee has not incurred any interest expenditure directly or indirectly with respect to its investment made for Rs.64,42,600/-. Therefore in the case of the assessee only Rule 8D(2)(iii) will be applicable and accordingly we hereby sustain the addition of Rs.32,213/- and further direct the Ld.A.O to delete the addition of Rs. 4,28,272/- (Rs.4,60,482 – Rs.32,213) made by applying the Rule 8D(2)(i) & (ii) of of the Rules.
Deemed Dividend u/s 2(22)(e) - business commitments of the assessee and its sister concerns - HELD THAT:- It is apparent that both the assessee and its sister company are dealers in automobiles of different nature and engaged in business with close proximity. The combined endurance to market the products in the same vicinity results in close commercial ties between the assessee company and its sister company. As a result both the companies were maintaining current accounts in order to achieve their respective business targets. Therefore it cannot be said that, the interdependence for meeting several business commitments of the assessee and its sister concerns does not result in commercial nexus between the assessee company and its sister concerns.
As pointed out by the Ld.AR some expenses were met by both the companies which were reimbursed by either company. These facts are not disputed. Moreover at the close of the financial year the current account maintained by the assessee with its sister concern showed nil balance. In this situation, we are of the view that the decision of the Jurisdictional High Court in the case CIT vs. C. Subba Reddy would be most appropriate, wherein it was held that “when no benefit has accrued to assessee and credit was a result of business transaction and was neither in nature of loan or deposit hence, provisions of Sections 2(22)(e) of the Act do not stand attracted.” Further in the case of the assessee the circular No.19/2017 supra is also very relevant. Considering these aspects of the case, we are of the considered view that provisions of Section 2(22)(e) of the Act will not be applicable in the case of the assessee. Therefore we hereby direct the Ld.AO to delete the addition made by invoking the provisions of Section 2(22)(e) - Decided in favour of assessee.
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2019 (9) TMI 1645 - ITAT BANGALORE
TP Adjustment - transactions with non-Denmark AEs - Whether not covered under MAP? - HELD THAT:- AO should restrict the TP adjustment in respect of non- Denmark AEs as per MAP resolution in respect of Denmark AEs.
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2019 (9) TMI 1644 - ITAT DELHI
Exemption u/s. 11 & 12 - corpus donation - DR submitted that the CIT(A) ignored the fact that in the absence of written direction from the donor, the donation will not be treated as corpus donation and consequently, from part of the income of the organization - CIT(A) allowed the appeal of the assessee - HELD THAT:- CIT(A) has rightly observed that merely making an accounting entry does not change the substance of the transaction that the Corpus Fund has been utilized for the purchase of capital assets. Thus, there is no need to interfere with the findings of the CIT(A). The appeal of the revenue is dismissed.
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2019 (9) TMI 1643 - ITAT PUNE
Maintainability of Revenue appeal against the order of CIT(A) in deleting the additions - low tax effect - HELD THAT:- Undisputedly, the tax effect involved in appeal is less than the monetary limit prescribed by the recent CBDT Circular No.17/2019 [F.No.279/Misc.142/2007-ITJ (Pt)] dated 08th August, 2019 read with Circular No.3 of 2018 dated 11.07.2018 for filing of appeals before the Tribunal by the Department. The CBDT vide circular dated 08-08-2019 (supra) has amended Para 3 of Circular No.3 of 2018 dated 11-07-2018 thereby enhancing monetary limit of tax effect from ₹ 20 Lakhs to ₹ 50 Lakhs for filing of appeals by the Department before the Tribunal. Thus, without going into merit of the issues raised in the appeal, in view of the CBDT Circular (supra) the present appeal of the Revenue is dismissed on account of low tax effect. Appeal of revenue dismissed.
Deduction in respect of education cess - HELD THAT:- Allowability of the said cess as allowable deduction is decided in favour of the assessee by virtue of the Hon’ble Rajasthan High Court’s judgement in the case of Chambal Fertilisers And Chemicals Ltd[2018 (10) TMI 589 - RAJASTHAN HIGH COURT]
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