|
Advanced Search Options
Income Tax - Case Laws
Showing 141 to 160 of 641 Records
-
2015 (3) TMI 1083 - ITAT HYDERABAD
Interest charged under S.201(1A) - AO taking the period of delay on the basis of calendar month instead of month of 30 days as claimed by the assessee - Held that:- In the present case, clause (ii) of S.201(1A) read with Clause (b) of Rule 119A is applicable and it provides that where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month, and the interest shall be so calculated. The dispute in this context as involved in the present case is whether the month for such calculation of interest is to be taken as a British calendar month or a period of 30 days.
It is observed that similar controversy had arisen in the case of CIT V/s. Arvind Mills Limited (2011 (9) TMI 244 - GUJARAT HIGH COURT ), wherein the assessee claimed interest under S.244A on the basis of British calendar month. The claim of the assessee, although was not allowed by the Assessing Officer as well as the learned CIT(A), the Tribunal allowed the same. When the matter was carried before the Hon’ble Gujarat High Court in an appeal filed by the Revenue, Their Lordships held that a reading of sub-section (1) of S.244A, the relevant provisions of which are analogous to the provisions of clause (ii) of S.201(1A) read with Rule 119A, would make it clear that the term ‘month’ must be given the ordinary meaning of the term of 30 days period and not the British calendar month as defined in S.3(35) of the General Clauses Act. It was held that the definition given in General Clauses Act cannot be adopted for the purposes of subsection (1) of S.244A as such importation of the definition would lead to anomalous situation. Thus direct the Assessing Officer to recompute the interest payable under S.201(1A) by taking a period of 30 days as a month instead of British calendar month. - Decided in favour of assessee
-
2015 (3) TMI 1069 - ITAT MUMBAI
Penalty u/s.271(1)(c) - deduction of interest expenses without deducting TDS - Held that:- In this case, the penalty has been levied for disallowance of expenditure u/s.40(a)(ia) of the Act. It is not a case of furnishing of inaccurate particulars of income or concealment of income. The failure to deduct the TDS on the part of the assessee has resulted in disallowance of expenditure. The assessee had not furnished any inaccurate particulars of income or expenditure. The assessee has already faced the consequences by way of disallowance of expenditure for non-deduction of TDS as per the provisions of section 194C of the Act. It is not the case of the Revenue that the assessee had not incurred the expenditure claimed or that the claim of expenditure was bogus or incorrect. The disallowance of expenditure was attracted due to non-deduction of TDS and it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income. The levy of penalty u/s.271(1)(c) of the Act is not attracted in this case and the same is accordingly ordered to be deleted. - Decided in favour of assessee.
-
2015 (3) TMI 1068 - ITAT MUMBAI
Transfer pricing adjustment - selection of comparable - Held that:- KJMC Corporate Advisors (India) Limited company is in the business of investment, merchant banking, corporate finance and similar activities which cannot be compared to the investment advisory activities. There is no dispute that the assessee’s international transaction with the AE is only with respect to the investment advisory and no other service or activity like investment, merchant banking, corporate finance etc. Thus the company KJMC Corporate Advisors (India) Limited cannot be treated as functionally comparable with the assessee.
The company Motilal Oswal Investments Advisors Pvt. Ltd is not functionally comparable with the assessee as is engaged in the business of Merchant Banking and, therefore, is not a good comparable of a company providing investment advisory services to the AE - Decided against revenue
-
2015 (3) TMI 1067 - ITAT MUMBAI
TDS U/S 194C not made within the due date - Disallowance made under section 40(a)(ia) - CIT(A) deleted the disallowance - Held that:- CIT(A) has committed no error in deleting the disallowance by following the decision of IT AT Mumbai in the case of Piyush C. Mehta(2012 (4) TMI 349 - ITAT MUMBAI ) in which it has followed the decision of Hon'ble Calcutta High Court in the case of Virgin Creation (2011 (11) TMI 348 - CALCUTTA HIGH COURT ) to held Amendment to the provisions of Sec.40(a)(ia) of the Act, by the Finance Act, 2010 is retrospective from 1.4.2005. - If tax was deductible and was so deducted during the first eleven months of the previous year, that is, up to February, 2005, the disallowance was to be made if the assessee failed to pay it before 31st March, 2005 - provisions of Sec.40(a)(ia) of the Act, by the Finance Act, 2010 is retrospective from 1.4.2005 - assessee had deposited the tax deducted at source on or before the due date for filing return of income u/s.139(1) of the Act and therefore the impugned disallowance deserves to be deleted - Decided in favour of assessee.
-
2015 (3) TMI 1066 - ITAT HYDERABAD
Disallowance u/s 14A - revision u/s 263 - Held that:- The order of the CIT u/s 263 is subsequent to the order of the CIT (A) on the very same issue. Once a particular matter has been considered and decided in appeal, on the issue of inclusion of processing fee incurred during the year for inclusion of disallowance u/s 14A of the Act the order of A.O has got merged with the order of the CIT (A) and the CIT has no jurisdiction to invoke the provisions of section 263 on the very same issue.
Respectfully following the decision of the Hon'ble Bombay High Court in the case of CIT vs. Tejaji Farasram Kharawala (1953 (3) TMI 29 - BOMBAY HIGH COURT), we hold that the jurisdiction assumed u/s 263 of the Act is erroneous on the ground that the order of the AO has merged with the order of the CIT (A) and the CIT has no jurisdiction to revise u/s 263 of the Act.
-
2015 (3) TMI 1065 - ITAT AHMEDABAD
Addition on account of Long Term Capital Gain (LTCG) on sale of open land on the basis of DVOs report - Held that:- AO is directed to delete the addition as Hon'ble Gujarat High Court decision HIABEN JAYANTILAL SHAH Versus INCOME-TAX OFFICER AND ANOTHER [2008 (4) TMI 292 - GUJARAT HIGH COURT] is directly applicable in the appellant's wherein held AO could not have formed any opinion as to existence of difference between the value of the asset as claimed by the assessee and the fair market value – reference can be made only when AO records opinion that value had been underestimated by assessee - S. 55A could not have been resorted to by the AO - reference to valuation officer is quashed and set aside
The value of the property was declared as per Registered valuer's report by the appellant and the value estimated by the DVO was less than that declared by the appellant. - Decided against revenue
-
2015 (3) TMI 1052 - ITAT AHMEDABAD
Non deduction of tds on technical work and related to engineering - submission of the Assessee that the Services provided by the non- resident were not in the nature of “making available” hence Article 12 of India U.S.A. treaty were not applicable - CIT(A) deleted the addition - Held that:- CIT(A) while deleting the addition has noted that the services provided by Colardo Engineering was with respect to giving the report of correctness of calibration of assessee’s meters. He has further noted that the expertise connected with testing has not been passed on to the Assessee and therefore the aggregate payment of ₹ 52,26,667/- cannot be treated as fee for technical services and is not covered u/s 195. Before us Revenue has not brought any material on record to controvert the findings of CIT(A). Further the case laws relied upon by ld. D.R. are distinguishable on facts and cannot be applied to the facts in present case. We further find that in the case of ITO vs. Veeda Clinical Research (2014 (1) TMI 886 - ITAT AHMEDABAD) the Co-ordinate Bench after relying on the decision in the case of DIT vs. Guy Carpenters and Company Ltd. [2012 (5) TMI 31 - DELHI HIGH COURT ] and CIT vs. Debeers India Pvt. Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT ] has held that the condition precedent for invoking the “make available” clause is that the services should enable the person acquiring the services to apply technology contained therein. It further held that unless there is a transfer of technology involved in technical services the “make available” clause is not satisfied. Before us Revenue has not brought any binding contrary decision in its support. We therefore find no reason to interfere with the order of CIT(A) and we therefore dismiss the ground of Revenue. - Decided in favour of assessee.
-
2015 (3) TMI 1031 - DELHI HIGH COURT
Determination of arms' length rate of interest - ITAT holding that the interest @ 4% p.a. charged by the respondent assessee from its subsidiary i.e. the Associated Enterprise was arm's length rate of interest and the adjustment made in the Assessment Order determining the arms' length rate of interest at 12.20% was unwarranted - Held that:- We have no hesitation in holding that the interest rate should be the market determined interest rate applicable to the currency concerned in which the loan has to be repaid. Interest rates should not be computed on the basis of interest payable on the currency or legal tender of the place or the country of residence of either party. Interest rates applicable to loans and deposits in the national currency of the borrower or the lender would vary and are dependent upon the fiscal policy of the Central bank, mandate of the Government and several other parameters. Interest rates payable on currency specific loans/ deposits are significantly universal and globally applicable. The currency in which the loan is to be re-paid normally determines the rate of return on the money lent, i.e. the rate of interest.
The methodology recommended by Klaus Vogel Klaus Vogel on Double Taxation Conventions (Third Edition) under Article 11 appears to be the reasonable and proper parameter to decide upon the question of applicability of interest rate. The loan in question was given in foreign currency i.e. US $ and was also to be repaid in the same currency i.e. US $. Interest rate applicable to loans granted and to be returned in Indian Rupees would not be the relevant comparable. Even in India, interest rates on FCNR accounts maintained in foreign currency are different and dependent upon the currency in question. They are not dependent upon the PLR rate, which is applicable to loans in Indian Rupee. The PLR rate, therefore, would not be applicable and should not be applied for determining the interest rate in the extant case. PLR rates are not applicable to loans to be re-paid in foreign currency. The interest rates vary and are thus dependent on the foreign currency in which the repayment is to be made. The same principle should apply.
Income-Tax Appellate Tribunal was right in in holding that the interest @ 4% p.a. charged by the respondent assessee from its subsidiary i.e. the Associated Enterprise was arm's length rate of interest and the adjustment made in the Assessment Order determining the arms' length rate of interest at 12.20% was unwarranted - Decided in favour of assessee
-
2015 (3) TMI 1030 - DELHI HIGH COURT
Reopening of assessment - notice under Section 148 challenged - Held that:- The reason to believe recorded by the Assessing officer is not based on any material that had come to the knowledge of the Assessing Officer. There is a mere suspicion in the mind of the assessing officer and the notice under section 147/148 has been issued for the purpose of verification and for clearing the cloud of suspicion. The reasons to believe recorded do not show as to on what basis the Assessing Officer has formed a reasonable belief that the said amount of ₹ 2,00,000/- had escaped assessment. It is apparent the Assessing Officer suspects that the income has escaped assessment. However, mere suspicion is not enough. The reasons to believe must be such, which upon a plain reading, should demonstrate that such a reasonable belief could be formed on some basis/ foundation and had in fact been formed by the Assessing Officer that income has escaped assessment. No such reasonable belief can be inferred from the purported reasons to believe recorded.
The words "reason to believe" indicate that the belief must be that of a reasonable person based on reasonable grounds emerging from direct or circumstantial evidence and not on mere suspicion, gossip or rumour. The "reason to believe" recorded in the case do not refer to any material that came to the knowledge of the Assessing Officer whereby it can be inferred that the Assessing Officer could have formed a reasonable belief that the said amount had escaped assessment. The purported belief that income has escaped assessment is not based on any direct or circumstantial evidence and is in the realm of mere suspicion. The requirement of law is "reason to believe" and not "reason to suspect". In the present case, since the purported reasons to believe recorded indicate that the Assessing Officer has acted on mere surmise, without any rational basis, the action of reopening of the Assessment is thus clearly contrary to law and is unsustainable. - Decided in favour of assessee.
-
2015 (3) TMI 1029 - KARNATAKA HIGH COURT
Penalty imposed under Section 271(1)(c) - Tribunal dismissed the appeal of the Revenue and the penalty imposed under Section 271(1)(c) has been disallowed - Held that:- Additions in respect of which penalty under Section 271(1)(c) of the Act was levied, have been admitted by the High Court for consideration and thus found that the additions made were debatable and would lead credence to the bonafides of the assessee. It thus held that the matter of imposing penalty under Section 271(1)(c) of the Act, was not exigible in the case on hand.
The mere admission of the appeal by the High Court on the substantial questions of law as have been quoted above, would make it apparent that the additions made were debatable. The Tribunal has thus rightly held that the admission of substantial questions of law by the High Court leads credence to the bona fide of the assessee and therefore, the penalty is not exigible under Section 271(1)(c) of the Act. Merely because the claim of the assessee has been rejected by the revenue authorities would not make the assessee liable for penalty. The Apex Court in Reliance Petroproducts ( 2010 (3) TMI 80 - SUPREME COURT ) also held that "merely because the assessee had claimed the expenditure, which claim was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by AO for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the legislature - Decided in favour of assessee.
-
2015 (3) TMI 1028 - BOMBAY HIGH COURT
Validly of reassessment proceedings - addition on account of sales made to Johnson & Johnson Exports Limited - Held that:- Tribunal noted that the law is that the reasons ought to be supplied on demand by the assessee. The assessee, therefore, had no occasion to note the reasons and could not object to the same. Since the objection to the same could not be raised for want of supply of reasons, the reassessment proceedings are vitiated
The Tribunal noted that the Assessing Officer held that in the earlier assessment years assessee had sold the goods to its subsidiary concern at lesser price than the cost of producing those goods and sold to other parties. This was a vital and material fact not disclosed by the assessee in the return of income for the concerned and subject assessment years. That is why the assessment was reopened. The Tribunal has recorded in that these reasons for reopening the assessment are not at all convincing. The Tribunal concluded that in the notice issued under section 148 for reopening the assessment, the Assessing Officer stated that there was omission on the part of the assessee to furnish the true and correct affairs of the company. Apart from the fact that this was not enough for reopening the assessment the Tribunal found that if the Assessing Officer had any reservation about the sale price of the goods sold to the group concerns he should have questioned the genuineness of the transactions in the earlier assessment years 1993- 1994 to 1995-1996. All information regarding the sale by the assessee was before him. Full and true facts of sale price were made available to the Assessing Officer when he passed the orders for the earlier years.The Tribunal has not merely set aside the reassessment for want of notice or for want of supply of reasons though notice was issued. The Tribunal rested its conclusion also on merits of the reasons for reopening the assessments. That the Tribunal found them to be not sufficient or adequate for reopening the assessment - No substantial question of law. - Decided against revenue.
-
2015 (3) TMI 1027 - RAJASTHAN HIGH COURT
Deduction u/s 80HHC on counter sales - whether ITAT as well as the CIT(A) was justified in allowing the deduction u/s 80 HHC when there is no finding to the effect that the goods were cleared at any of the custom station? - Held that:- Apex Court in CIT vs. Silver & Arts Palace [2002 (12) TMI 12 - SUPREME Court] has held that the counter sale to the foreign tourists against convertible foreign exchange in India, is eligible for deduction under section 80HHC of the Income Tax Act. The Apex Court has also approved the decision of the Allahabad High Court in the case of Ram Babu & sons vs. Union of India [1996 (5) TMI 61 - ALLAHABAD High Court].
In the present case the assessee had produced the Sale To Foreign Tourists Voucher, which not only recorded the name and address of the customer (tourist), but also his/her passport number and the declaration given by him that the goods will not be gifted or sold in India. The goods sold at counter at the shop/emporium were sold to be taken out of the country, which necessarily involved clearance of baggage, by the customs authorites. There was no further proof, nor any document in proof of clearance of the goods at the Customs Station by the assessee is required. The declaration in the form of Sale To Foreign Tourist Voucher, for sale made against the convertible foreign exchange with the undertaking that the goods will not be gifted or sold in India, was sufficient proof for export out of India. Unless anything contrary was alleged and proved by the department, it was not necessary for the assessee to have produced the documents of clearance of goods sold by him to the foreign tourists at any Customs Station. The Explanation (aa) is not a rule of evidence, nor raises any presumption. It also does not require any proof of clearance at any Customs Station. The explanation is couched in double negative. It is a rule of exclusion and excludes only those transactions, which do not involve clearance at any Customs Station. It cannot be read in a manner, as suggested by learned counsel appearing for the department that a proof of customs clearance of baggage must be provided to establish the export of goods out of India for the purpose of deduction of profits on such sales under section 80HHC of the Income Tax Act. - Decided in favour of assessee.
-
2015 (3) TMI 1026 - BOMBAY HIGH COURT
Disallowances on the loss of shifting classified securities - Held that:- Tribunal in dismissing the revenue's appeal and upholding the order of the Commissioner found that similar exercise was undertaken by another assessee Latur Urban Coop. Bank Ltd. [2015 (3) TMI 920 - ITAT PUNE]. - Once such is the nature of material before the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, then, we are of the opinion that the view taken by the Tribunal cannot be termed as perverse. The Tribunal's view is in consonance with the banking policy and the guidelines issued by the Reserve Bank of India. We further feel that a different treatment cannot be given to an identically situated assessee, namely a co-operative bank. In these circumstances, the revenue's appeal has no merits - Decided against Revenue.
-
2015 (3) TMI 1025 - ITAT MUMBAI
Transfer pricing adjustment - assessee has challenged the addition on account of transfer pricing adjustment in respect of sale made to the associated enterprise by applying comparable uncontrolled price method instead of transactional net margin method - Held that:- Under a particular description, invoices raised to associated enterprise and non-associated enterprise were similar. Exact difference in invoices have not been brought forth before us. Thus in the case of the assessee, there was availability of the internal comparable uncontrolled price, wherein on similar nature of transaction and similar description of product as given in the invoices, the assessee has been charging prices from the associated enterprise as well as from the third party. Even though there may be some differences of size, carat, weight and other aspects, however the same has not been clearly demarcated or demonstrated by the assessee either before the Transfer Pricing Officer or before the Commissioner of Income-tax (Appeals). In such a situation the presumption can be drawn, that even with the third party customers, similar nature of products have been sold on negotiation and, therefore, the prices of the two transactions can be compared. In a way, we uphold the contention of the learned Commissioner of Income-tax (Appeals) that there was internal comparable uncontrolled price available in the case of the assessee for determining the transfer price. Once a direct method of internal comparable uncontrolled price is available then there is no need to resort to transactional net margin method.- Decided against revenue.
Transfer pricing adjustment on account of transactions of sale of diamond with the associated enterprise - CIT(A) deleted the addition - Held that:- Out of the three transactions, which has been adversely viewed by the Transfer Pricing Officer, two transactions pertained to sale made by the assessee to one M/s. Simona NV. Now it has been brought on the record before the Commissioner of Income-tax (Appeals), which has also been a subject matter of remand before the Transfer Pricing Officer that the said transactions have been cancelled, as the said party has returned back/diverted the diamonds sold to them to the assessee's associated enterprise. This is evident from the letter dated October 14, 2010, written by Simona NV. Thus as from the above letter and relevant finding of the Commissioner of Income-tax (Appeals), it is quite conclusive that, the said party has not purchased the diamonds sent on these two invoices and ultimately, it has been sold to associated enterprise only. Thus, such a transaction cannot be considered for benchmarking and determining the arm's length price. Once the particular transaction, which is the subject matter of comparison for transfer pricing adjustment, has not even undertaken or has been cancelled, then such a transaction has to be excluded for the purpose of benchmarking the transfer price. Thus with regard to the non inclusion of such a transaction and also the consequent deletion of adjustment of ₹ 1,28,19,493 on account of such transaction is both factually and legally correct and has rightly been deleted by the Commissioner of Income-tax (Appeals). - Decided against revenue.
Adjustment on account of transactions with one of the third party - sale made to the associated enterprise by applying comparable uncontrolled price method instead of transactional net margin method - Held that:- In this particular transaction, the assessee has sold a total quantity of 2773.20 to its associated enterprise with an average rate of 328.89 dollars, whereas to the third party, the assessee has merely sold quantity of 8.50 carats with the rate of 370 dollars. Thus there is a huge difference in volume of sale and it is quite a normal phenomena that if the purchases and sales are made in huge quantity then there is always a chance of negotiation of preferable price by the purchaser and there is difference in the price as compared to the one where very small quantity of sale or purchase takes place. Such difference of volume, definitely has a bearing on the negotiation of the prices and, therefore, adjustment on this factor has to be made. This itself is a material difference. We, also agree with the contention of the assessee that marketing expenses in the case of the associated enterprise are comparatively less as there is quite probability of the transaction being finalised. There is also an element of bad debt risk involved in the case of a third party which is much less probable in the case of the related party. If all these differences, which in our opinion are quite "material differences" are taken into account and adjustment is made then difference of rate, which here in this case is approximately 11 per cent., can be made. Thus, looking to these factors of material difference including huge difference in volume, adjustment of a differential rate of 41.11 in terms of dollars in the transaction of sale price between associated enterprise and third party can be made under the comparable uncontrolled price, which is also permissible under rule 10B. Accordingly, we hold that such a price difference in the aforesaid transaction has to be ignored and adjustment has to be made for comparing the negotiated price charged from the associated enterprise as well as from the third party and if such an adjustment is carried out then there is no requirement for making any kind of upward adjustment in this case. Therefore, the decision of the Commissioner of Income-tax (Appeals) in confirming the adjustment of ₹ 51,32,512 to the arm's length price is reversed and the said addition is deleted. - Decided in favour of assessee.
Transfer pricing adjustment on account of notional interest on delayed collection of payment on sale invoices from associated enterprises in comparison to non-associated enterprises - CIT(A) deleted the addition - Held that:- The average days of delay in payment as worked out by the Transfer Pricing Officer is also inappropriate as number of sale transactions with associated enterprise is far more than the non-associated enterprise and will result in improper working of average days. On these facts of the case, we do not find any reason for making any kind of upward adjustment on account of differences in period for realisation of payments in respect of sales made to associated enterprise as well as non-associated enterprises. Such a notional interest cannot be charged for the purpose of making adjustment in the arm's length price. Thus the order of the Commissioner of Income-tax (Appeals) deleting the adjustment of Rs, 4,65,23,007 on this score is upheld - Decided in favour of assessee.
-
2015 (3) TMI 1024 - ITAT BANGALORE
Transfer pricing adjustment - Computation of Arms Length Price - selection of comparable - Held that:-Flextronics Software Systems Ltd. 595.12 crores and Infosys Technologies Ltd. 9028.00 crores whose turnover is above ₹ 200 Crores should be excluded from the list of comparable companies. The AO is directed to compute the Arithmetic mean by excluding the aforesaid companies from the list of comparable.
Respectfully following the decision of of Tektronix Engineering (2015 (3) TMI 267 - ITAT BANGALORE), we direct that KALS InfoSystems Ltd. And Accel Transmatic Ltd. And TATA Elxsi be excluded from the list of 20 comparable arrived at by the TPO.
There is no dispute that RPT filter in the case of Megasoft Ltd. was 17.08%, that of Aztech Software Ltd. was 17.78% and that of Geometric Software Ltd. was 19.34%. Coordinate Benches of the Tribunal are consistently following 15% as cut off mark for applying the RPT filter. Accordingly, we direct exclusion of Megasoft Ltd., Aztech Software Ltd. and Geometric Software Ltd. from the comparables. See Agile Software Enterprise Private Limited, C/o. Oracle India Private Ltd. Versus The Income Tax Officer [2015 (1) TMI 600 - ITAT BANGALORE]
Inclusion of the reimbursement of expenses by the AE to the Assessee as part of the operating cost while working the adjustment on account of ALP - Held that:- It is clear from the decision rendered by the co-ordinate bench in the case of L.G.Soft India Pvt.Ltd. (2013 (9) TMI 191 - ITAT BANGALORE) that reimbursement of expenses cannot be considered as receipts for rendering services and should not be added back to the cost base for the purpose of mark up. Following the said decision, we hold that reimbursement of expenses cannot be considered as receipts for rendering services and should not be added back to the cost base for the purpose of mark up. As submitted by the learned DR neither the TPO not the DRP have gone into the question as to whether the receipt in question is reimbursement. We therefore remand the issue to the limited extent of verification regarding the nature of the receipt only and hold that if the receipts are purely reimbursement of expenses they should neither be considered as operating income nor operating expenses for the purpose of calculating margins of the Assessee. - Decided partly in fvaour of assessee for statistical purposes.
-
2015 (3) TMI 1023 - ITAT JAIPUR
Liability for TDS u/s 194H - discount on sale of recharge vouchers (RCVs) and the starter kits by the appellant to its channel partners (distributors/ dealers) - Held that:- The relationship between assessee and its distributors qua the sale of impugned products is on principal to principal basis; the consideration received by assessee is sale price simpliciter. There is no relationship of Principal and agent between assessee and distributors as held by authorities below there orders are reversed.
Looking at the transaction being of Sale/Purchase and relationship being of principal to principal the discount does not amount to commission in terms of sec. 194H, the same is not applicable to these transactions. Therefore, assessee cannot be held in default; impugned demand raised applying sec. 194H is quashed. See Bharti Airtel Ltd. And Others Versus Deputy Commissioner of Income-tax and Commissioner of Income Tax, Bangalore [2014 (12) TMI 642 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
Non providing details of deductee regarding filing of I.T. Returns before the AO (TDS) during the proceedings - whether incomplete and unverified information could not have been considered as additional evidence under Rule 36A of Income Tax Rules? - Held that:- Apropos the revenue appeal since we have held that sec. 194H is not applicable there remains no substance in revenue appeals. In any case there is no infirmity in the order of Ld. CIT(A) in admitting the additional evidence in the light of Hon'ble Supreme Court judgment in the case of Hindustan Coca Cola (2007 (8) TMI 12 - SUPREME COURT OF INDIA ) and following his past orders. - Decided against revenue.
-
2015 (3) TMI 1022 - ITAT DELHI
Transfer pricing adjustment - selection of comparable - Held that:- Cosmic Global Ltd. company outsourced its activities and the outsourcing expenses constitute 57% of the total expenses. The entire outsourcing is confined to Translation charges paid at ₹ 3.00 crore. We can see from the TPO’s order that he considered the results of this company on entity level, thereby reckoning income from all the three segments. Since Translation charges constitute a larger chunk of this company’s income, for which the services were mainly outsourced, we cannot consider this company as comparable on an entity level.
Genesys International falls under serial No. vi. of the Circular with the caption ‘Geographic Information System Services.’ There can be no comparison of the services carried out by this company with those rendered by the assessee to its AEs, which are basically in the nature of Accounts payable services and General accounting for funds, falling under (i) Back office operations; (ii) Call centres; (iv) Data processing; and (xiii) Revenue accounting. By no standard, Genesys International can be considered as comparable with the assessee company.
Vishal Information Technologies (Coral Hub) has outsourcing charges constitute 90% of the total operating cost. The business model adopted by this company in outsourcing its activities in contrast to that of the assessee in rendering services at its own, makes the two incomparable to each other. Thus we order for the exclusion of this company from the list of comparables.
Accentia Technologies company, apart from being engaged in the business of rendering ITES, is also dealing with software products. As the segmental figures of this company are not available and the TPO has taken its entity level figures, it ceases to be comparable. To what extent the overall profitability of this entity is affected because of software products, is not capable of ascertainment with precision. Also the Annual report of this company that it completed acquisition of Oak Technologies Inc. USA during the year. The Mumbai Bench of the Tribunal in Petro Araldite (P) Ltd. vs. DCIT (2015 (3) TMI 1010 - ITAT MUMBAI) has held that a company cannot be considered as comparable because of exceptional financial results due to mergers/demergers etc. We, therefore, order for the exclusion of this company from the list of comparables.
Eclerx Services Pvt. Ltd.being a KPO company, is providing data process solutions to its clients, which activity is a way different from that of the assessee company, which is basically of providing accounts payable services and general accounting services to its AEs alone. Not only that, this company has significant intangibles which its uses for the purposes of rendering KPO services. As the assessee is a captive unit rendering services to its AEs without any intangibles, there can be no comparison between the assessee and Eclerx Services Pvt. Ltd.
Allsec Technologies Ltd. If a company fails on one of the filters adopted by the TPO, it has to be excluded. We, therefore, uphold the impugned order in not considering Allsec Technologies as a comparable company.
R. Systems International Ltd.from the audited accounts of this company that the audited data for the quarter ending 31.3.2009 and 31.3.2008 has been provided by the company itself. Ordinarily, there should be no difficulty in determining the relevant figures for the year ending 31.3.2009 by excluding the results for the quarter ending 31.3.2008 and including the results of the quarter ending 31.3.2009 to the annual figure for the year ending 31.12.2008. Thus, it is apparent that the figure of profit for the year ending 31.3.2009 is capable of ascertainment. We, therefore, set aside the impugned order on this issue and direct to include R. Systems in the list of comparables by working out the figures relevant to the financial year ending 31.3.2009 from the audited accounts - remit the matter to the file of AO/TPO for calculating the ALP of the international transaction afresh - Decided partly in favour of assessee for statistical purposes.
-
2015 (3) TMI 1021 - ITAT DELHI
Disallowance u/s 14A - A.R. submitted that the A.O. has made disallowance u/s 14A as per the provisions of Rule 8D without recording satisfaction which is mandatory in law and therefore, the disallowance is not sustainable - Held that:- In the present case the A.O. vide questionnaire dated 22.10.2010 had asked the assessee to explain as to why disallowance in accordance with the provisions of Section 14A should not be made and thereafter holding that reply of the assessee was not satisfactory he proceeded to disallow the amount as calculated as per provisions of Rule 8D. The A.O. did not record as to how the explanation submitted by assessee was not satisfactory. The A.O. should have examined the claim of assessee and then he should have recorded his satisfaction as to why the reply of assessee was unsatisfactory. Therefore, respectfully following the order of Taikisha Engineering India Ltd. (2014 (12) TMI 482 - DELHI HIGH COURT), we delete the disallowance confirmed by Ld. CIT(A). - Decided in favour of assessee.
-
2015 (3) TMI 1020 - ITAT DELHI
Addition on undisclosed profit - Held that:- A.O. has based his findings on the basis of surmises and conjectures and that too without commenting upon the explanations of assessee. Moreover, in the present year, we find that assessee has not earned any income from lease which fact is verifiable from paper book page 8 where a copy of P & L account is placed and where there is nil other income as compared to earlier year income of ₹ 10,02,511/-. Therefore, facts in the present year are distinguishable as in the present year the assessee had filed documentary evidences with respect to gold rates and in this year there is no lease income. The addition sustained by Ld. CIT(A) is not based upon facts. - Decided in favour of assessee.
Addition on account of undisclosed stock - CIT(A) deleted the addition - Held that:- As during appellate proceedings before Ld. CIT(A), the assessee had filed necessary and relevant documents to demonstrate that Jewellery sold to M/s. Swarn Gems P. Ltd. consisted out of opening stock and jewellery received on approval basis from Mehrasons Jewellers (P) Ltd.. The assessee had field copy of stock ledger as well as sale tax assessment order for the year under consideration. We find that findings of Ld. CIT(A) are based upon verification of facts and evidences and, therefore, he had rightly deleted the addition.- Decided in favour of assessee.
-
2015 (3) TMI 1019 - ITAT JAIPUR
Concealed sales of scrap - assessee could not give evidence regarding non return of the scrap by the vendors/subvendors doing job work for and it is most unlikely that assessee will allow vendors/sub-vendors to keep scrap with them, on which it is paying excise duty itself. - CIT(A) deleted the addition - Held that:- No infirmity in the order of the learned CIT(A) inasmuch as nothing has been brought on record by learned Assessing Officer that the assessee's job workers returned any scrap to assessee. Nothing has also been brought on record to demonstrate in any way that assessee indulged in any sale of scrap outside the books of account. This is further indicated by new Cenvat Credit Rules, which holds that the scrap was not required to be returned to the assessee. The same is referred to by the judgment in the case of M/s Rocket Engineering Corporation Vs. CCE (2005 (6) TMI 184 - CESTAT, MUMBAI). The assessee further provided evidence from M/s Noble Industries, which has done a job work of 3.56 crores and has shown the income attributable to sales of scrape of ₹ 747109/-, in its books. These facts and observations demonstrate that the assessee did not receive any scrap back from job workers. There being no evidence whatsoever suggesting any unaccounted sales by the assessee, the order of learned CIT(A) on these issues is upheld. - Decided in favour of assessee.
Unaccounted sale of scrap - the balance amount to difference shown by the assessee as receivable from SKF and the payable amount in the books of SKF - CIT(A) deleted the addition - Held that:- The assessee has demonstrated that the difference was due to the disputes pertaining to defective and inferior quality of goods. The assessee used to account for the actual invoice value whereas the purchases were accounted by SKF not on the basis of the sales bills but on the basis of settled amounts qua these invoices. All these issues have been discussed in details by the learned CIT(A) as mentioned above. In view thereof, we see no infirmity in the order of the learned CIT(A) on this issue also, which is upheld. - Decided in favour of assessee.
Excise duty on sale of scrap paid by the assessee - CIT(A) deleted the addition - Held that:- the assessee demonstrated that as per Rule 4(6) of the Central Excise Rules, the assessee was liable for excise duty on the notional value of nonreturnable scrap. Thus, the assessee has to face the situation where the scrape was not returnable to it and on top of that the excise duty on such scrape was also payable by the assessee as per excise rules. In view thereof, the excise duty in respect of unreturned scrap becomes a statutory/legal liability of the assessee, which is allowable business expenditure. The learned CIT(A) has considered the issue in right perspective and we see no infirmity in its order on this ground, the same is upheld.- Decided in favour of assessee.
............
|
