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Income Tax - Case Laws
Showing 1 to 20 of 804 Records
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2021 (9) TMI 1542 - KARNATAKA HIGH COURT
TDS u/s 195 - Royalty - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - Whether constitutes as taxable income deemed to accrue in India u/s 9(1)(vi) - income deemed to accrue or arise in India - HELD THAT:- As assessee submits that the substantial questions of law raised herein are squarely covered in the case of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT]
Revenue could not dispute the same.In view of the aforesaid submissions, the substantial questions of law are answered in favour of the assessee and against the revenue.
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2021 (9) TMI 1541 - ITAT DELHI
Disallowance of depreciation on goodwill - As per the scheme of amalgamation, where value of liabilities and amount of equity capital allotted /payment to the equity shareholders exceeds the value of assets of the transferor company taken over, such excess shall debited to the goodwill account - HELD THAT:- We find that this claim is no more res-integra as the issue has been settled in favour of the assessee and against the revenue by the decision of in the case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] We do not find any error or infirmity in the findings of the CIT(A). Decided against revenue.
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2021 (9) TMI 1538 - ITAT MUMBAI
Rectification of mistake - TP adjustment on account of payment of I.T. Licence Maintenance cost - HELD THAT:- We find that the CIT(A) in the impugned order has given a finding that no tax has been deducted by the assessee on payment for I.T. Licence Maintenance Cost. Whereas, the contention of assessee is that the assessee has deducted tax at the rate of 21.115% under section 206AA of the Act. The Tribunal after considering entire facts has restored the issue back to the file of TPO/AO to reexamine the issue. Since, the issue required examination of documents, the Tribunal has rightly restored the issue back to TPO/AO. Assessee has failed to point out any mistake much less any apparent mistake requiring indulgence u/s 254(2) of the Act. Therefore, the first prayer made by assessee is rejected.
Adjustment on account of payment of interest on trade creditors - Tribunal has wrongly mentioned in the order that the assessee filed additional evidence i.e. Circular issued by Peri GMBH (Parent company of the assessee/applicant) - As assessee made a statement at the Bar that though the said circular was filed but no reliance was being placed on that circular and prayer to admit aforesaid circular as additional evidence was not made. The assessee does not want to place reliance on the said circular as the issue can be decided without making reference to the above circular. In the light of statement made by assessee, we are of considered view that the error has crept in the order of Tribunal in taking cognizance of the circular as additional evidence. Since, no reliance was placed by assessee, the Tribunal has erred in taking cognizance of the circular. Therefore, the second prayer of the assessee seeking rectification of the finding in para-11 of the order of Tribunal [2021 (3) TMI 403 - ITAT MUMBAI] is accepted.
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2021 (9) TMI 1537 - KARNATAKA HIGH COURT
Disallowance of speed money expenditure - perusal of the loose sheets found in search - ITAT while considering the case of the Revenue challenging the allowance of 90% of speed money observed that “mere perusal of the loose sheets it is clear that about 10% of the cash payments was made to the officials of the port trust” and disallowance to the extent of 10% is just and proper.
HELD THAT:- This order amounts to allowing the appeals filed by the assessee which are still pending where the challenge is made to the extent of disallowance of 10%. On further miscellaneous petitions filed by the assessee strangely the Tribunal has held that no finding has been rendered as to the nature of payments found in loose sheets which is ex-facie contrary to the finding recorded in the order dated 02.05.2017. This would indicate that the Tribunal has not applied its mind while arriving at the conclusion.
Tribunal being the last fact finding authority ought to have discussed the factual aspects, more importantly when the Assessing Officer has made efforts to discover the tax evasion, placing reliance on the incriminating materials seized and the statements of the relevant persons recorded. Instead of adjudicating on the challenge made by the Revenue, passing the orders to the effect of deciding the subject matter of the appeals filed by the assessee which were not before the Tribunal, amounts to perversity and suffers from patent illegality. The impugned orders lack application of mind and reasoning.
Given the circumstances, we have no other option except to set aside the impugned orders and remand the matter to the Tribunal for reconsideration, keeping open all the rights and contentions of the parties sans answering the substantial questions of law.
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2021 (9) TMI 1536 - ITAT MUMBAI
Characterization of receipts - Chargeability of interest on deposits/loans - assessee has been following this system from the earlier years and the interest income has been offered as a business income - only difference of opinion with the CIT(A) that, these surplus funds are not necessary to the assessee and there is no requirement for the assessee to make deposits - HELD THAT:- As in the present case, the assessee company has earned interest on bank deposits and on short term call money loan. AR demonstrated working of interest income on bank deposits and interest on term loan - interest income earned on the term loan provided @6% p.a. in the August 2005 was continuing and interest income was offered in earlier financial years.
Borrower of loan has provided guarantee to lenders of the assessee company which benefited substantially to the assessee business projects and operations. Since the term loan provided by the assessee to the barrower is linked in obtaining counter guarantee to assessee business prospects and there exist the nexus of business transactions. We considering all are of the opinion that interest income earned by the assessee take the character of business transaction and to be treated as business income. Accordingly, we direct the Assessing Officer to treat the interest income taxable as business income and allow the grounds of appeal of the assessee.
Claim of depreciation u/s 32(1)(ii) - right to set up an infrastructure facility and collect annuity thereon - assessee had constructed the Road and have the right to earn revenue in the form of annuity from the use of such intangible Asset being license or business or commercial right contemplated under the provisions of the Act - HELD THAT:- We considering the factual aspects, circumstances, legal decisions West Gujarat Expressway Ltd [2016 (4) TMI 1184 - BOMBAY HIGH COURT] ,Infrastructure Leasing & Financial Services ltd [2019 (12) TMI 1499 - ITAT MUMBAI] are of the opinion that the assessee is eligible for depreciation on Road on (B.O.T) basis treating it as Intangible Asset under section 32(1)(ii) of the Act. Accordingly, we direct the assessing officer to grant depreciation as discussed and allow the additional ground of appeal in favour of the assessee.
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2021 (9) TMI 1535 - ITAT AMRITSAR
Penalty u/s 271D - allegation of non recording of satisfaction by AO before initiation of any penalty - HELD THAT:- As perused the assessment order passed by the AO the assessment order is conspicuously silent on recording of any satisfaction by the assessing officer for the purpose of initiative the penalty u/s 271D.
In our considered opinion the recording of satisfaction by the AO is essential for initiation of any penalty u/s 271D of the act and failure to record, the satisfaction in the manner provided by the law and more particularly in the light of the judgement, is fatal, and accordingly the penalty proceedings initiated against the assessee by the assessing officer and confirmed by the CIT(A) are required to be quashed - Appeal of assessee allowed.
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2021 (9) TMI 1533 - SC ORDER
Depreciation on intangibles - trademarks owned wholly or partly by the assessee - assessee succeeded to the business of the partnership firm, which had trademarks registered in its name - As decided by HC [2020 (10) TMI 424 - KARNATAKA HIGH COURT] assessee u/s 32(1) was entitled for depreciation with reference to actual cost incurred by it with reference to intangible assets - 5th proviso in any case will apply only in the year of succession and not in subsequent years and also in respect of overall quantum of depreciation in the year of succession and Tribunal committed an error of law in upholding the order of Commissioner of Income Tax (Appeals) in invoking Explanation 3 to Section 43(1) -
HELD THAT:- Issue notice, returnable on 08.11.2021.
Dasti service, in addition, is permitted.In the meantime, the impugned judgment and orders passed by the High Court are stayed.
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2021 (9) TMI 1531 - ITAT DELHI
Income taxable in India - gains arising from transfer of CCDs - treating the gains on sale of CCDs to be taxable - interest income or capital gain - HELD THAT:- An undisputed fact that identical issue arose in assessee’s own case for A.Y. 2011-12 & 2012-13. For A.Y. 2011-12, the Hon’ble Delhi High Court [2014 (8) TMI 9 - DELHI HIGH COURT] has held that the gain on CCDs to be treated as capital gains.
We further find that the Co-ordinate Bench of Tribunal in assessee’s own case for A.Y. 2013-14 [2021 (9) TMI 1530 - ITAT DELHI] by following the decision of Hon’ble Delhi High Court, dismissed the appeal of the Revenue. Before us, no distinguishing feature in the facts in the year under consideration and that of earlier years has been pointed out by the Revenue. Further no material has been placed by Revenue to demonstrate that the decision rendered by Hon’ble Delhi High Court in assessee’s own case for A.Y. 2011-12 has been stayed/ set aside/ overruled by higher judicial forum. Considering the totality of the aforesaid facts, we find no reason to interfere with the order of CIT(A) [2021 (9) TMI 1530 - ITAT DELHI]and thus the grounds of Revenue are dismissed.
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2021 (9) TMI 1530 - ITAT DELHI
Income taxable in India - gains arising from transfer of CCDs - taxability as capital gains OR interest income - CIT(A) held that the gains arising to the assessee on the transfer of Compulsorily Convertible Debentures (CCDs) is in the nature of capital gains and shall not be taxable in India under Article 11 of the DTAA between India and Mauritius - HELD THAT:- The issue has been dealt by the Hon’ble Authority of Advance Ruling (AAR) [2012 (4) TMI 154 - AUTHORITY FOR ADVANCE RULINGS] while dealing with Article 11 and Article 13 as held that the entire gains arising to the applicant on the sale of equity shares and CCDs are not exempt from capital gain tax in India under DTAC with Mauritius. The gains arising on the sale of CCDs being interest within the meaning of Section 2(28A) of the Act and Article 11 of the DTAC and are taxable as such.
Against the above ruling of AAR the assessee filed writ petition before Hon’ble Delhi High Court [2014 (8) TMI 9 - DELHI HIGH COURT] has decided the issue against the findings of the AAR and has held that pre-mature exit options as recorded in the SHA and the minimum return assumed by Vatika on its investment are clearly commercial agreements between the parties. These by itself do not change the legal nature of the transaction entered into between the parties. The terms of the arrangements between Vatika and the petitioner reveal that the JV was a genuine commercial venture, in which both partners had management rights. The call and put options were defined commercial options capable of being elected by the parties. In our opinion, there is, thus, no reason to ignore the legal nature of the instrument of a Compulsorily Convertible Debenture or to lift the corporate veil to treat the JV Company and Vatika as Single entity. In view of the above, the writ petition is allowed and the impugned ruling is set aside.
As held that the revenue has not accepted the above order of Hon’ble Delhi High Court and has filed SLP before Hon’ble Supreme Court which is pending for adjudication and made addition on the amount in contravention to the existing ruling of the Hon’ble Jurisdictional High Court.
Thus grounds raised by the revenue that the appeal has been filed before the Tribunal solely based on the foundation that the SLP filed by the revenue has been admitted and notice has been issued in this case. Since, at this juncture the order of the Hon’ble High Court prevails on the substantive question of law which stands adjudicated in favour of the assessee, we hereby dismiss the appeal of the revenue.
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2021 (9) TMI 1528 - KARNATAKA HIGH COURT
Income taxable in India - royalty receipts - amounts paid by the concerned persons resident in India to non-resident for foreign software suppliers - HELD THAT:- Assessee submits that the substantial questions of law raised herein are squarely covered by the ruling of the Hon’ble Apex Court in the case of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] held that amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act.
Revenue could not dispute the same. Substantial questions of law are answered in favour of the assessee and against the revenue.
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2021 (9) TMI 1527 - GUJARAT HIGH COURT
Validity of notice issued u/s 153C - writ direction or order to quash and set aside the impugned notices u/s 153C and the order disposing off the objections along with the show Cause Notices issued for A.Y. 2016- 17, A.Y. 2017-18 and A.Y. 2018-19 - HELD THAT:- For the reasons to be followed which for the paucity of time, order not being dictated today.
The petition is not entertained.
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2021 (9) TMI 1526 - ITAT AHMEDABAD
Penalty levied u/s. 271(1)(c) - Furnishing of inaccurate particulars of income in respect of process loss - Assessee has submitted that wastage was borne by the assessee in case of export sale and in case of local sale it was borne by the parties - in the assessment made u/s. 143(3), AO has made disallowance of processed loss - CIT(A) after reducing the sale made from wastage product i.e. chindri, fandrages restricted the disallowance - HELD THAT:- We have gone through the judicial pronouncement referred by the ld. counsel in the case of CIT, Ahd Vs. Reliance Petro Products P. Ltd. [2010 (3) TMI 19 - SUPREME COURT] wherein it is held that mere making of the claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee.
Such claim in the return of income cannot amount to inaccurate particulars of income. In the light of the above facts and findings, we consider that only on the basis of not accepting the claim made by the assessee, the levy of penalty u/s. 271(1)(c) is not appropriate. Accordingly, the Assessing Officer is directed to delete the penalty. Therefore, this ground of appeal of the assessee is allowed.
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2021 (9) TMI 1521 - MADRAS HIGH COURT
Validity of Assessment passed u/s 144C as objections before DRP are pending - As argued if the petitioner had informed the first respondent within 30 days period that it intends to file objections before the DRP, first respondent would have awaited the directions of DRP - HELD THAT:- Revenue counsel very fairly submits that the period of limitation stood extended owing to the Covid-19 situation and in the light of the typed-set of papers forming part of the case file, it is clear that the petitioner has gone before the DRP. Therefore, the first respondent has to await directions from DRP as the objections of the writ petitioner are pending with DRP.
Order - The impugned Assessment Order is set aside solely on the ground that objections before DRP are pending and directions of DRP under 144C(5) has to be awaited under 144C (13).Though obvious it is made clear that this Court has expressed no opinion or view on the merits of the matter.
On DRP issuing directions, the first respondent shall proceed with the assessment de novo on its own merits, in accordance with law and complete the exercise as expeditiously as the business of the first respondent would permit.
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2021 (9) TMI 1517 - ITAT PUNE
TP adjustment - international transactions in connection with payment of brand royalty and payment of professional fees - benchmarking the international transaction without appreciating the fact that the said international transaction is closely interlinked to the manufacturing activity of the Appellant - HELD THAT:- The crux of the discussions wherein in the Tribunal’s order for the assessment year 2009-10, it has observed that the assessee had paid brand royalty under two agreements, first, at 0.5% under the agreement dated 01.07.2008 and then again under another agreement dated 05.04.2001. The duplicate amount of royalty earlier paid was directed to be disallowed.
The relevant part of this Tribunal order [2021 (7) TMI 681 - ITAT PUNE] for the assessment year 2010-11 in assessee’s own case remit the matter to the file of AO/TPO for redetermining the ALP of the international transaction of payment of Royalty and disallow the duplicate payment of brand Royalty in terms indicated above in the Tribunal order - Ground allowed for statistical purposes.
Management services fess and payment of professional fees - Tribunal observed that in its own order for the assessment year 2009-10 [2019 (4) TMI 1505 - ITAT PUNE] following the view taken for the preceding year held that the assessee did avail services from its AE and the authorities below were not justified in coming to the conclusion that no services were obtained by the assessee.
We set aside the impugned order on this score and remit the same to the file of the AO/TPO for fresh determination of ALP of the international transaction of payment of management services fee in accordance with the observations and directions given in the Tribunal order passed for the assessment year 2009-10 [2019 (4) TMI 1505 - ITAT PUNE] and 2010-11 [2021 (7) TMI 681 - ITAT PUNE]. Thus, Grounds allowed for statistical purposes.
Disallowance u/s. 37 in respect of royalty expenditure incurred by the assessee - CIT(Appeals) had taken a view that the assessee is engaged in manufacture of equipments through licenses from group concerns. Royalty has been paid in respect of technical know-how obtained for manufacturing of equipments. Since the technology and designs have been used by the assessee in its manufacturing, the royalty for the same cannot be said to be for nonbusiness purposes.
Similarly, brand royalty has been paid for the use of brand on the products manufactured by it. It was therefore an admitted fact that assessee was using the Brand name and logo on its manufactured products. These payments, therefore, cannot be considered as meant for nonbusiness purposes in respect of transfer pricing adjustment. This view of the Ld. CIT(Appeals) was left unaltered and relief provided to the assessee was sustained by the Tribunal.
Before us also, DR submitted that there is no difference on the facts and circumstances for this year also and the issue is covered in favour of the assessee. That when the facts and circumstances are similar and that a view has already been taken which is factually analyzed, therefore, on same parity of reasoning under same set of facts and circumstances, we allow this ground of appeal. Thus, Ground No.2 raised in appeal by the assessee is allowed.
Disallowance u/s.37 in respect of legal and professional fees incurred by the assessee on account of HR, legal, IT, finance, sales, marketing and other ancillary services - As decided in own case assessment year 2010-11 [2021 (7) TMI 681 - ITAT PUNE] CIT(A) has given cogent reasons for deleting the disallowance inasmuch as the AO simply adopted the TPO’s reasoning without showing as to how the same applied to the non- AE transactions as well. Further, the expenditure contains payment for Testing fees and also Generic service fee. To this extent, we approve the view taken by the ld. CIT(A).
TDS u/s 195 - non deduction of tds on commission on sale to overseas sales agents - HELD THAT:- As decided in Kikani Exports Pvt. Ltd [2014 (9) TMI 96 - MADRAS HIGH COURT] wherein it was held that the services rendered by the non-resident agent can at best be called as a service for completion of the export commitment and would not fall within the definition of fees for technical services and therefore, section 9 of the Act is not applicable to the instant case and consequently, section 195 of the Act does not come into play. The assessee has further submitted that it is a settled position of law that the retainer ship charges/commission paid to overseas non-resident agents for promoting assessee’s business in foreign countries is not in the nature of fees for technical services and therefore, is not liable to be taxed in India. Thus no statutory obligation to make TDS u/s.195 of the IT Act in respect of the commission paid to overseas sales agents.
Disallowance u/s.14A r.w. Rule 8D - AO proposed to the assessee that the expenditure incurred in relation to the dividend income in respect of this investment is required to be disallowed - assessee objected to the same on the ground that no dividend income has been received during the year with regard to this investment - HELD THAT:- It is a settled position of law that when no exempt income has been received by the assessee then there cannot be any disallowance u/s.14A of the Act. This view was also taken in the case of HOLCIM INDIA P. LTD. [2014 (9) TMI 434 - DELHI HIGH COURT] and based on this decision of the Hon’ble Delhi High Court, the Ld. DRP had directed the Assessing Officer to delete the addition. Therefore, we are of the considered view on the given facts and circumstances, there is no need for interference with the findings of the Ld. DRP and relief provided to the assessee is sustained.
Revenue appeal dismissed.
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2021 (9) TMI 1515 - ITAT RAIPUR
Estimation of business income - difference in the gross receipts between the books of accounts and the annual statement of the department (26AS) - substitution and adoption of receipts as appearing in Form 26AS in place of entries shown as per audited book and estimation of business income/net profit thereon @ 8% discarding the book results - assessee submitted that the difference in the gross receipts between the books of accounts and the annual statement of the department (26AS) is on account of timing difference in recognition of income.
HELD THAT:- Both the orders are totally non-descript and has nothing worth to say for substitution of book results with estimated profits. Noticeably, in the assessment order, the AO has categorically made an averment to the effect that books of accounts have been produced by the assessee and test checked. The AO has not made mention of any material which could questions the correctness and bonafide of the book results declared.
AO is stoically silent on any kind of deficiency in books or excessive claim of any expenses etc. which could substantiate his action. It is incumbent upon the AO to record the inconsistency or incorrectness in the books which prevents the AO to ascertain true income chargeable to tax. The AO has neither rejected the books nor a single voucher was alleged to be unverifiable.
The pre-condition for estimating business income, where the assessee maintains books of account is that the books of assessee should be found to be unreliable or otherwise not realistically capable for demonstrating the income of assessee. Without this first step, the fact that the gross profit/net profit is low cannot by itself be a ground for taking a view that it is open to the AO to make good alleged deficiency in profits declared. Thus, the action of the AO requires to be cancelled and set aside on this score alone being devoid of any legitimacy.
Gross profit rate/net profit rate cannot be estimated cursorily and in a routine manner without showing as to how the book results are superfluous.AO has not brought any material which has any reasonable nexus to the estimation.
As rightly stated on behalf of the assessee, even the best judgment assessment cannot be done in a vindictive manner and should be based on reasonable and fair estimations.
AO in the instant case has not crossed the barrier to enable it to go into arena of estimation. The estimation is permissible only on showing that the books of accounts are so defective that it is not possible to ascertain the truthfulness of the profits arising therefrom.
The onus is upon the Revenue to show that either the books of account maintained by the assessee were incorrect or incomplete or that the method of accounting adopted by him was such that true profits of the assessee cannot be deduced therefrom. For rejection of books of accounts, the AO is required to demonstrate specific defects in the books of accounts produced by the assessee and also as to how the books of accounts produced by the assessee is not giving clear picture of the profit earned from the business activity.
Even where the books are rejected, the discretion must be used by the AO judiciously. We also find considerable substance in the plea of the assessee for not indulging estimates of such whopping nature particularly when lesser net profit rates of 2.19% and 1.10% declared in A.Y. 2016-17 and A.Y. 2017-18 has been endorsed by the Revenue itself in regular assessments.
Hence, on giving due weightage to the peculiar facts and circumstances of the case, we find merit in the plea of the assessee for reversal of its consequent substitution by the actual income as per books as offered. Thus, we reverse the action of the lower authorities and restore the position of the assessee. Decided in favour of assessee.
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2021 (9) TMI 1514 - MADRAS HIGH COURT
Deduction u/s 80HHC - simultaneous deduction under Section 80HHC and 80IB on the same profits - whether deduction u/s 80IA should not be deducted from the profits and gains of business before computing ? - HELD THAT:- It is not disputed before us that the above substantial questions of law were considered in the case of Micro Labs Ltd [2015 (12) TMI 708 - SUPREME COURT] In the light of the difference of opinion between the Hon'ble Judges, the matter has been directed to be placed before the Hon'ble Chief Justice of India, so that the matter can be referred to a larger Bench.
Tax Case Appeal is allowed and the order passed by the Tribunal, as well as the Commissioner of Income Tax (Appeals), Large Taxpayer Unit, Chennai, are set aside and the matter is restored to the file of the Assessing Officer, who shall await the decision of the larger Bench of the Hon'ble Supreme Court, in the reference made in the case of Micro Labs Ltd. (supra).
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2021 (9) TMI 1512 - ITAT DELHI
Delay in filing the appeal before CIT(A) - delay in filing the appeal was stated to be medical issues of the Learned Counsel - HELD THAT:- We find that Hon'ble Supreme Court in the case of N. Balakrishnan vs. M. Krishnamurthy [1998 (9) TMI 602 - SUPREME COURT] has held that as long as the conduct of the applicant does not, on the whole, warrant to castigate him as an irresponsible litigant, generally, the delay be condoned.
It has further held that rules of limitation are not meant to destroy the right of parties but they are meant to see that parties do not resort to dilatory tactics. It has further held that in every case of delay there can be some lapse on the part of litigant concerned, however, that alone is not enough to turn down his plea and to shut the door against him.
It is a settled law that in matters of condonation of delay, a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities. Before us, no material has been placed by Revenue to demonstrate that the delay in filing the appeal before CIT(A) by the assessee was due to some mala fide intention on its part.
In view of the well settled principle of natural justice that sufficient opportunity of hearing should be afforded to parties and no party should be condemned unheard, we are of the view that the delay in filing the appeal before CIT(A) needs to be condoned. We accordingly condone the delay.
Since the CIT(A) has not decided the appeal on merits, we are of the view that one more opportunity be granted to the assessee to present its case. We therefore restore the matter back to the file of CIT(A) to decide the issue on merits afresh in accordance with law. Needless to state that CIT(A) shall grant adequate opportunity of hearing to both the parties. Thus the grounds of assessee are allowed for statistical purpose.
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2021 (9) TMI 1510 - HIMACHAL PRADESH HIGH COURT
TDS u/s 194C - income tax on interest payable to the claimants/respondents on compensation awarded a/u Motor Accident Claim - HELD THAT:- Section 194-A of Income Tax Act, 1961, clearly provides that any person, not being an individual or a Hindu undivided family, responsible for paying to a ‘resident’ any income by way of interest, other than income by way of interest on securities, shall deduct income tax on such income at the time of payment thereof in cash or by issue of cheque or by any other mode. Compensation awarded under Motor Vehicle Act cannot be said to be taxable income. Compensation is awarded in lieu of death of a person or bodily injury suffered in a vehicular accident, which is damage and not income.
It is well settled that interest awarded by the Motor Accident Claims Tribunal on a compensation is also a part of compensation upon which income tax is not chargeable as also held as titled Court On Its Own Motion v. the H.P. State Cooperative Bank Limited [2014 (10) TMI 972 - HIMACHAL PRADESH HIGH COURT].
Therefore, in view of above said decision, deduction of income tax by petitioner/Insurance Company on the interest accrued/awarded on the compensation deposited by the petitioner/Insurance Company is illegal and is contrary to the law of land.
This petition is disposed of directing respondent No. 7 Income Tax Officer, (TDS), Sector 2, Panchkula, Haryana to refund the TDS to the petitioner/Insurance Company within eight weeks from date of receiving information thereof, failing which petitioner company shall also be liable to pay interest @ 9% per annum on the said amount with effect from 20.6.2018 till payment/deposit.
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2021 (9) TMI 1507 - KERALA HIGH COURT
Nature of expenses - expenditure incurred by the assessee for renovation of the lease hold premises for setting up a new show room - revenue expenditure or capital expenditure - HELD THAT:- As questions of law raised in the appeal are considered by this Court in assessee's own case for the AY 2007- 08, and answered in favour of the assessee and against the Revenue. The said judgment is reported in Joy Alukkas India Pvt. Ltd v. The Assistant Commissioner of Income Tax [2014 (6) TMI 80 - KERALA HIGH COURT]
Having regard to the view already taken by this Court on the substantial questions being considered in the appeal on hand, the questions are answered in favour of the assessee and against the Revenue. Hence, the appeal fails.
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2021 (9) TMI 1502 - ITAT BANGALORE
TP Adjustment - provision of back-office support services/income received from ITES segment - comparable selection - HELD THAT:- Exclusion of Universal Print, TCS e-serve and Infosys BPO from the list of comparables and remand BNR Udyog Ld. AO/TPO to consider it afresh in light of the observations made by coordinate bench of this Tribunal reproduced hereinabove.
Negative working capital computed by the Ld.TPO, without appreciating the fact that assessee is a captive service provider - We find that in the case of Software AG Bangalore Technologies (P.) Ltd. [2016 (3) TMI 1384 - ITAT BANGALORE] passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis.
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