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Income Tax - Case Laws
Showing 61 to 80 of 661 Records
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2021 (8) TMI 1278
Refund determined u/s 143(3) inclusive of interest u/s 244A - HELD THAT:- On instructions, learned counsel for respondent nos.2 & 3 states that the petitioner’s rectification application dated 19th December, 2019 shall be disposed of within a period of six weeks and the refund shall be processed within three weeks thereafter.
Consequently, this Court directs the respondent no.2 to dispose of the petitioner’s aforesaid rectification application, in accordance with law, within six weeks by way of a reasoned order. The respondent no.2 shall also process and pay the petitioner’s refund within three weeks thereafter, in accordance with law. All the rights and contentions of the parties are left open.
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2021 (8) TMI 1277
Offences u/s 276CC and 276C (2) - petitioner company had filed self assessment tax - petitioner company had filed self assessment tax on 29.11.2014 for the financial year 2013-14 relevant to the assessment year 2014-15 which is defective for non payment of self assessment tax u/s 140A before furnishing the return of income which constitutes an offence u/s 276 CC and 276 C(2) - contention of the learned counsel for the petitioners is that the petitioners have paid the entire dues to the Income Tax department along with interest - HELD THAT:- It is not in dispute that the petitioners had paid the entire amount with interest to the Income Tax department, which is confirmed by the Deputy Commissioner of the Income Tax, Corporate Circle2(2), Chennai-34. The offences alleged are only technical offences and there is no material to show that there was any deliberate and conscious evasion of tax on the part of the petitioners. In view of the same, this Court is of the view that the proceedings are liable to be quashed and accordingly, quashed. Resultantly, this Criminal Original Petition is allowed. Consequently, connected miscellaneous petitions are also closed.
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2021 (8) TMI 1274
Applicability of Equalization Levy on payments to be received by the Petitioner - Whether the Respondents erred in law and on facts in re-characterizing the nature of payments to be received by the Petitioner from Indian Customers as “Fee for Technical/Included Services” under the Income-tax Act, 1961 / India-USA Double Taxation Avoidance Agreement (DTAA) rather than “business income”? - HELD THAT:- Issue notice. Mr.Ruchir Bhatia, Advocate accepts notice. He prays for and is granted six weeks time to file the counter affidavit. Rejoinder affidavit, if any, be filed before the next date of hearing.
Since the petitioner has prayed for refund of taxes and this Court is of the view that the said prayer would adequately protect the interest of the petitioner, the prayer for interim stay is declined. List the matter before the Joint Registrar (Judicial) for completion of pleadings on 10th December, 2021.
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2021 (8) TMI 1272
TP Adjustment - comparable selection - HELD THAT:- Asit C Mehta be excluded from the list of comparables as this company is, the company is having more than one segment. Whereas, separate segmental data is not available in the public domain - the employee cost of the company works out to 22.78% of the total cost as compared to assessee’s employee cost of 48.27%. Further, the turnover of the assessee is more than eighty times of the turnover of the company. See DBOI GLOBAL SERVICES PVT. LTD. [2016 (8) TMI 1292 - ITAT MUMBAI], ZAVATA INDIA PRIVATE LIMITED [2013 (6) TMI 405 - ITAT HYDERABAD] and STREAM INTERNATIONAL SERVICES PRIVATE LIMITED [2014 (10) TMI 393 - ITAT MUMBAI]
Infosys BPO Ltd is to be excluded for the reason that it is engaged in rendering software development and related technical activities. We have also found from record that the facts based on which the company was rejected in assessment year 2006-07 are no different in the impugned assessment year. In view of the aforesaid, we exclude this company from the list of comparables.
Vishal Information Technologies Ltd be excluded for the reason that instead of performing the work itself, it outsources the work to third party vendors.
Wipro Limited (Seg) be excluded on the ground that it has exceptionally high turnover compared to assessee’s turnover.
eClerx Services Ltd incurred a major part of its expenses towards outsourcing of services, whereas, the assessee is a routine BPO service provider without outsourcing any of its activities. Thus, in our view, this company cannot be comparable to the assessee.
Moldtek Technologies Ltd be excluded as this company is providing structural engineering and design services of construction of building. Further, the company has undertaken expansion vigorously. Thus, there is extraordinary growth which could have resulted in abnormal profit margin of 113.49%. Further, the employee cost of the company as a percentage of the total cost works out to meager 8.41% as compared to assessee’s employee cost of 48.27%. Thus, these factors, in our view, do not make the company comparable to the assessee.
Informed Technologies India Ltd company serves the needs of the financial content sector in the USA. It collects and analyses data on financial fundamentals, corporate governance, structures/executes compensation and capital market. The company caters to the niche market segment of financial content and its targeted clientele include well known and respected American Corporate. Thus, as it appears, the company is functionally dissimilar to the assessee.
Caliber Point Business Solutions Ltd and HCL Comnet Systems Pvt Ltd (Seg) be excluded on the ground that their related party transaction (RPT) is substantially high compared to assessee - we find, HCL Comnet Systems India Ltd (Seg) has been rejected by different benches of the Tribunal in case of other assesses for the reason of having a different financial year ending, different business model and super normal profit. Thus we exclude these two companies from the list of comparables.
I Services India Pvt Ltd company is engaged in providing remote data entry services to its clients in USA. Further, it has reported a profit margin of 50.27% for the year under consideration, which is exceptionally high in terms of industry norms. Due to the super normal profit earned by the company for the year under consideration, the Tribunal excluded it from being considered as a comparable in case of Pentair Water India P Ltd [2016 (5) TMI 137 - BOMBAY HIGH COURT], which is for the very same assessment year - thus we exclude this company from the list of comparables.
Deduction on account of Education Cess paid by the appellants - HELD THAT:- We find that the issue raised in the additional ground stands decided in favour of the assessee by the decision of Hon’ble jurisdictional High Court in case of Sesa Goa Ltd . [2020 (3) TMI 347 - BOMBAY HIGH COURT]. Respectfully following the aforesaid decision of the Hon’ble jurisdictional High Court, we direct the assessing officer to verify the facts and allow deduction of education cess paid by the assessee.
Benefit of -5% relief to the assessee - HELD THAT:- As per settled legal principle, the benefit of (+)/(-) 5% under section 92C(2) cannot be allowed as standard deduction. With the aforesaid observations, these grounds are dismissed.
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2021 (8) TMI 1268
Search executed u/s 132 - Seeking release of jewellery and cash seized by the Respondents from the Locker - HELD THAT:- As order dated 13.08.2021, we had tried to balance the interest of the petitioner i.e., the assessee as well as the respondents/revenue.
On 13.08.2021, we had refrained from passing a final order, though the legal issue was considered and a view was taken, with the hope that, the respondents/revenue would agree with the proposed directions, which are contained in paragraph 6.1 of our order dated 13.08.2021.
Respondents/revenue, says that, his instructions are that, the respondents/revenue seem to be constrained by the language of Section 132B of the Income Tax Act, 1961 (in short “the Act”).
In our view, such a stand is untenable, and the reasons for the same are set forth in the order, dated 13.08.2021.
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2021 (8) TMI 1267
Reopening of assessment u/s 147 pursuant to the order of the ld. CIT u/s 264 - Unexplained expenditure - HELD THAT:- In the case in hand, again pursuant to the order of the ld. CIT u/s 264 of the Act, notice u/s 148 of the Act was issued and served upon the assessee and reasons recorded for reopening the assessment are identical to the reasons recorded in the case of M/s Sam Portfolio Pvt Ltd[2020 (2) TMI 1142 - ITAT DELHI], though quantum may differ.
On finding parity on the facts of the case in hand with the facts of the case of M/s Sam Portfolio Pvt Ltd [supra], we have no hesitation in adopting the findings given by this Tribunal in the case of M/s Sam Portfolio Pvt Ltd [supra] considered view that the AO has wrongly assumed jurisdiction in framing the assessment order u/s 143(3) r.w.s 147.
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2021 (8) TMI 1266
Disallowance of deduction u/s 54F - Denial of natural justice - AR submitted before us by stating that the Ld. CIT (A) has passed ex-parte order without providing proper opportunity to the assessee of being heard - HELD THAT:- CIT (A) had posted the case on four occasions. However, none appeared on behalf of the assessee before the CIT(A) on the dates of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeals ex-parte. In this situation, We do not find much strength in the arguments advanced by the ld. AR.
Considering the prayer of the Ld. AR, in the interest of justice, We hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeals afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, We also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly. Appeals filed by the assessee are allowed for statistical purposes
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2021 (8) TMI 1263
Petition under “The Direct Tax Vivad se Vishwas Act, 2020 - as displayed on the E-filing portal of the Respondent that the said Declaration was rejected on 26.04.2021, mainly on the ground that the First Appeal was filed belatedly and there was no information received from the Assessing Officer, as to whether, the delay occurred in filing the Appeal before the Appellate Authority was condoned or not - HELD THAT:- As decided in [2021 (7) TMI 1267 - GUJARAT HIGH COURT] there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. In the opinion of the Court, the Respondent had to only take into consideration, as to whether, the Petitioner had filed an Appeal, and the same was pending on the ‘specified date’ i.e. 31.1.2020. It was not for the Respondent to decide, as to whether, such Appeal was irregular or incompetent or invalid in the eye of law.
In view of the above, the impugned communication dated 26.04.2021 rejecting the Declaration filed by the petitioner under the said Act, deserves to be quashed and set aside, and is accordingly quashed and set aside. The respondent is directed to accept the said Declaration under the said Act for the assessment year under consideration, if otherwise it is valid.
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2021 (8) TMI 1262
Assessment u/s 144C - timeline for filing of objections before the DRP - notice for initiating penalty proceedings under Section 271AAC(1) - HELD THAT:- Since an advance copy of the present writ petition had been served upon the petitioner, this Court has no other option but to proceed with the matter. However, the respondents are given liberty to seek variation/modification of the order in the event facts have been suppressed from this Court or facts have been mis-stated by the petitioner.
Having perused the paperbook, this Court finds that the Assessment Order has been passed in violation of mandatory procedure prescribed under Section 144C of the Act as well as the aforementioned CBDT Circular inasmuch as without waiting for the decision of the DRP, Respondent No. 1 has passed the final Assessment Order.
Keeping in view the aforesaid, the final Assessment Order dated 15th May, 2021, notice of demand issued under Section 156 and notice for initiating penalty proceedings under Section 271AAC(1) of the Act passed by Respondent No. 1 under Section 143(3) read with Section 144C for the assessment year 2017-18 are set aside and the proceeding is restored at the level of the DRP. With the aforesaid direction, the present writ petition along with pending applications stand disposed of.
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2021 (8) TMI 1261
Estimation of income - bogus purchases - HELD THAT:- Hon’ble Gujarat High Court in the case of Bholanath Polyfab Pvt. Ltd [2013 (10) TMI 933 - GUJARAT HIGH COURT held that when the assessee made purchases and sold the finished goods as a natural corollary not the entire amount covered under such purchases would be subject to tax but only the profit element embedded therein.
Similar view has been taken by the Hon’ble Gujarat High Court in the case of CIT v. Simit P. Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] - Simply because the parties were not produced the entire purchases cannot be added as held by the Bombay High Court in the case of CIT v. Nikunj Eximp[2013 (1) TMI 88 - BOMBAY HIGH COURT]
We agree with the view of the lower authorities that there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them - keeping in view the nature of business of the assessee i.e. trader in Ferrous and non-Ferrous Metals, it would be justified if the profit element embedded in those purchases are estimated at 4%. Accordingly, we direct the Assessing Officer to estimate the profit element from the non-genuine purchases at 4% for both the Assessment Years i.e., A.Y: 2009-10 and A.Y. 2011-12 and restrict the disallowance of purchases to 4% and compute the income accordingly. Apeals of the assessee partly allowed.
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2021 (8) TMI 1260
Reopening of assessment u/s 147 - Notice in the name of a non-existing company - notice in the name of company merged - HELD THAT:- As the notice issued under Section 148 of the Act to a non-existing company is bad in law. Petition, therefore, is allowed.
Whether clerical error which is rectifiable under Section 292-B? - It cannot be a clerical error because in the affidavit-in-reply it is admitted that the order dated 7th November 2014 of this Court with respect to the merger of ECD Electrons and Electrolysis Pvt. Ltd. into Lenient Finvest Pvt. Ltd. and the subsequent order of Lenient Finvest Pvt. Ltd. merging with petitioner under an approved scheme cleared by the National Company Law Tribunal, Mumbai, was available with respondents still respondents persisted with issuing the notice to ECD Electrons and Electrolysis Pvt. Ltd., a non existent company. - Decided in favour of assessee.
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2021 (8) TMI 1255
Rectification of form 3 - Vivad se Vishwas Scheme - HELD THAT:- The matter was disposed of as the senior standing counsel for the respondents has informed that after verification, it has been clarified that there was no wrong claim by the assessee and credit for this challan has been given in AU 2007-2008. Further ITBA e-filing portal is not functional and the process is likely to take some time.
Learned counsel states that Vivad se Vishwas Scheme is to come to an end on 31.08.2021. The petitioner has now been directed to make further payment of ₹ 22,44,555/- while denying refund of ₹ 5,29,09,130/-.
Notice of motion for 31.08.2021. On asking of the Court, Mr. Tajender Joshi, Advocate accepts notice on behalf of the respondents. Learned counsel for the respondents shall clarify their stand on the next date of hearing.
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2021 (8) TMI 1246
Reopening of assessment u/s 147 - Bogus purchases u/s 69C - HELD THAT:- In view of the AO’s as well as the CIT(A)’s respective detailed discussions justifying the impugned re-opening(s) based on the Investigation Wing, Mumbai’s information pinpointing the specific inputs in search proceedings including M/s.Bhanwarlal Jain group authorised persons statement(s) to have been providing bogus accommodation entries. We therefore hold that the Assessing Officer had rightly initiated the impugned re-opening process in all these three cases. The assessee fails in its identical first and foremost ground therefore.
Quantification of the impugned bogus purchases - As considered the foregoing rival submissions and find no reason to delete the impugned bogus purchases disallowance/addition in entirety in all these three assessment years. This is for the precise reason that going by the circumstances before us, it can be safely inferred that the assessee obtained bogus purchase invoices from M/s.Bhanwarlal Jain group and further sourced its purchases from other suppliers - this tribunal’s coordinate bench in ITO Vs. M.Shailesh and Co. [2019 (1) TMI 1922 - ITAT MUMBAI] as well as various other similar orders hold that only a percentage of such purchases than the entire amount(s) thereof has to be disallowed - interest of justice that the impugned bogus purchases in all these three year(s) deserve to be restricted to disallowance @8% only in the given facts and circumstances with a rider that the same shall not be taken as a precedent in any other case. Necessary computation shall follow as per law.
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2021 (8) TMI 1243
TP Adjustment - international transaction of payment for CCR Divisional Cost treating at Nil - HELD THAT:- TPO on one hand admitted that the assessee availed services from its AE and rendering of services by the AE to the assessee. In our opinion the said services were in terms of agreement as discussed above and evidences also on record substantiating the said services which clearly demonstrate that the assessee availed services from its AE. Therefore, we hold that the assessee proved the receipt of services from its AE. The ld. DR reported no objection in remanding the matter to the TPO for determination of arms length price. Therefore, we deem it proper to remand the issue to the file of TPO for its fresh adjudication to determine the ALP of international transaction in respect of CCR Division Cost. Thus, the ground No. 3 raised by the assessee is allowed for statistical purpose.
Disallowance of depreciation on goodwill - HELD THAT:- As relying on assessee’s own case for A.Y. 2003-04 [2016 (2) TMI 187 - ITAT PUNE] it is clear that the allowance of depreciation on goodwill is granted. There was no contrary view placed by the ld. DR before us. Thus, the ground No. 8 raised by the assessee is allowed.
Disallowance of depreciation on non-compete fees - HELD THAT:- Tribunal in assessee’s own case for A.Y. 2003-04 [2016 (2) TMI 187 - ITAT PUNE] it is clear that the allowance of depreciation on non-compete fees is granted.
Disallowance of depreciation on technical know-how and other assets - HELD THAT:- In the light of the orders of this Tribunal in assessee’s own case for A.Y. 2004-05 [2018 (1) TMI 12 - ITAT PUNE] it is clear that the allowance of depreciation on technical know-how and other assets is granted. There was no contrary view placed by the ld. DR before us. - Decided in favour of assessee.
Short grant of credit of taxes deducted at source - HELD THAT:- AR filed details of annual tax statement in Form No. 26AS and prayed to give a direction to the AO/TPO for examination of the same afresh. Upon hearing both the parties, we deem it proper to remand this issue to the file of AO/TPO for fresh adjudication by examining the details provided in Form No. 26AS and to decide the issue giving an opportunity to the assessee. Thus, ground No. 11 raised by the assessee is allowed for statistical purpose.
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2021 (8) TMI 1239
Glitches and shortcomings in the computer programme and software - petitioner challenging the subsequent Form-3 issued by the respondent/revenue after a full and final settlement of disputed taxes in Form-5 - modification of the software, the DGIT (Systems) is directed to join the proceedings - Petitioner contending that the designated authority was rendered functus officio after initial Form-5 had been issued on 28th December, 2020 - HELD THAT:- During the hearing, learned counsel for the respondent/revenue admits that the new Form-5 to be issued to the petitioner would be a photocopy of the Form-5 which had been issued to the petitioner on 28th December, 2020. Consequently, this Court is of the view that the petitioner should not be asked to furnish Form-4 and the original Form-5 dated 28th December, 2020 should be restored without any further ado!
But learned counsel for the respondent/revenue states that it is imperative that the petitioner should once again complete the process by filing Form-4 as the portal does not permit restoration of the previous Form-5 dated 28th December, 2020.
This Court is of the opinion that technology is intended to ease and facilitate transactions and cannot be used as a basis for harassing an assessee by asking him to repeatedly file unnecessary and irrelevant forms. This Court is also of the view that the software and the computerised systems should abide by lawful directions and it cannot be that the computer lays down an agenda contrary to law according to which the Court and assessees have to function. If the only impediment, in the way of granting the relief sought by the petitioners, is the software, then the same should be suitably modified.
To consider modification of the software, the DGIT (Systems) is directed to join the proceedings by way of online audio-video link on the next date of hearing.
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2021 (8) TMI 1238
TP Adjustment - Arm’s Length Price (ALP) adjustment regarding its corporate guarantee(s) - International transaction u/s 92B - HELD THAT:- There is no dispute that this tribunal’s various earlier coordinate bench decisions in Micro Ink Ltd [2015 (12) TMI 143 - ITAT AHMEDABAD], BHARTI AIRTEL LIMITED (BHARTI CRESCENT) [2014 (3) TMI 496 - ITAT DELHI] and Bartronics India Ltd [2017 (9) TMI 1649 - ITAT HYDERABAD] had indeed held a corporate guarantee to be purely a shareholder activity than forming an international transaction u/s.92B of the Act. This legal proposition is no more res integra in view of the PCIT Vs. M/s.Redington (India) Limited, [2020 (12) TMI 516 - MADRAS HIGH COURT]taking note of not only the foregoing legislative positions (supra) but also holding that the same carried retrospective effect as well.
We adopt the foregoing detailed discussion Mutatis Mutandis and hold that the learned lower authorities have rightly treated the assessee’s corporate guarantee(s) in all the three impugned assessment years as an international transaction falling u/s.92B.
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2021 (8) TMI 1235
Disallowances of payment on account of payment of employees contribution to Provident Fund and ESI - Amount paid before the due date before furnishing of the return of u/s 139 of the Act but not before the respective due date as prescribed under the law - HELD THAT:- The facts shows that the assessee has collected the sum being employee’s contribution under the provident fund and with respect to ESI laws. The above contribution was admittedly not deposited by the assessee within the due date prescribed under the respective ESI and PF statue however, same was deposited before the due date of filing of return of income - AO as well as the ld CIT(A) disallowed the same holding that such contribution becomes the income of the assessee under the provision of section 2(24)(x) of the Act and thereafter if the same is deposit within the due date prescribed under the respective laws then same is allowable as deduction u/s 36(1)(va).
Addition/disallowance made by the learned assessing officer of late deposit of employees contribution to the provident fund and ESI, as it is deposited before the due date of the filing of the return of an income but beyond the due date prescribed under the respective provident fund and ESI laws is not sustainable in law - Decided in favour of assessee.
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2021 (8) TMI 1232
Income deemed to accrue or arise in India - Royalty receipts - treatment of income from sale of off-the-shelf software - India- Ireland DTAA - whether the payments made to non-resident software suppliers is "royalty" and hence TDS u/s.195 was required to be deducted on those payments or not? - HELD THAT:- Issue involved in this appeal has been put to rest in view of the decision rendered in ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] and the issue involved in this appeal has been answered against the Revenue and in favour of the assessee.
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2021 (8) TMI 1228
Claiming Depreciation u/s 32 while claiming exemption u/s 11 - whether while computing income under section 11(1)(a) of the Income Tax Act, 1961, depreciation is not to be allowed? - HELD THAT:- The substantial questions of law framed for consideration have been answered in favour of the assessee in the case of CIT vs. Rajasthan and Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] held that normal depreciation could be considered as legitimate deduction in computing real income of assessee on general principles or under Section 11(1)(a).
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2021 (8) TMI 1227
Application under Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act). - Seeking Adjust/give credit to the amount paid by petitioner under the Income Declaration Scheme, 2016 (“the IDS”) - Tax in respect of voluntarily disclosed income is refundable or not - application made under the Direct Tax Vivad Se Vishwas Act, 2020 - HELD THAT:- Sub-Section (3) of Section 187 of IDS categorically provides if the declarant fails to pay the tax, surcharge and penalty in respect of the declaration made under Section 183 on or before the dates specified in sub-Section 1, the declaration filed by him shall be deemed never to have been made under the Scheme - declaration will be non-est.
Revenue cannot retain any amounts paid under a declaration which contemplated under the Scheme is deemed never to have been made. The Scheme does not provide for Revenue to retain the tax so paid in respect of a declaration which is void and non-est. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. This would mean there must be a law, the law must authorise the tax and the tax must be levied and collected according to the law.
In the absence of any such authority of law, a retention of tax contrary to the very Scheme cannot be permitted. Therefore, the provision of Section 191 cannot have any application to a situation where the tax is paid but the entire amount of tax is not paid and accordingly the retention of the tax by respondent no.1 is illegal.
Petitioner is entitled to an adjustment by giving credit to the amount paid under IDS. Respondent no. 3 is directed to rectify Form No. 3 issued under the DTVSV Act read with DTVSV Rules, to give credit to this amount and issue fresh Form No. 3, within two weeks from the day, an authenticated copy of this order is served upon respondent No. 3 by petitioner. Petitioner to make payment of disputed tax in accordance with revised / rectified Form-3 within a period of two weeks from the issuance of revised Form-3.
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