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Income Tax - Case Laws
Showing 161 to 180 of 783 Records
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2017 (3) TMI 1670 - ITAT BANGALORE
Business connection in India - permanent establishment in India - Held that:- Appellant's themselves admitted to the activities of the LO are taxable in India by showing income at cost + 6% basis - thus assessee's own admission by showing income attributable to the Indian operations, it has indirectly accepted the fact that they had business connection in India and also the Indian LO as the PE of Arrow Singapore - hence assessee's arguments deserve no consideration.
Quantification of profits attributable to the LO and the HO - Held that:- AO was reasonable in considering sectoral weightage at 50:25:25 for functions performed, assets employed and risks involved - further AO was correct in taking only 10% towards assets and risks in the intra sectoral ratio pertaining to LO and the balance 90% to the HO - hence the final quantification of 565 to LO and 235 to HO on a scale of 800 is held to be perfectly justified and accordingly quantification of 70 : 30 between the LO and the HO is upheld - The final quantification of profits attributable to the LO and the HO as per the table 1 , above , as per para 5 at 40 : 60 is also upheld
Levy of interest u/s.234B - Applying the ratio laid by the Supreme Court in the case of COMMISSIONER OF INCOME TAX VERSUS ANJUM MH GHASWALA AND OTHERS [2001 (10) TMI 4 - SUPREME COURT], has held that the levy of interest u/s.234B is mandatory - all the appeals of assessee is dismissed.
Transfer Pricing adjustment u/s 92CA - protective assessment - working capital adjustment - Held that:- CIT(A) confirmed AO's protective assessment wherein he has taken 40:60 to the LO:HO, held that the percentage of ALP as determined by the TPO should have been applied only on 40% of the total sales and the ALP should have been determined accordingly - also the working capital adjustment of 0.906% and 1.459% could be given in AY's 02-03 & 03-04, respectively - hence the orders of the CIT (A) do not require any interference and appeal of revenue is dismissed.
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2017 (3) TMI 1669 - ITAT BANGALORE
Revision u/s 263 - incriminating material for the purpose of making addition in the assessment made pursuant to notice u/s 153A - Held that:- During the course of assessment proceedings, the appellant has filed detailed submissions/information corroborating the statements made u/s 132(4) of the Act. Now it is settled proposition of law that in case of assessment made pursuant to notice issued u/s 153A of the Act, addition should be confined or based on incriminating material alone. The AO is precluded to travel beyond the incriminating material for the purpose of making addition in the assessment made pursuant to notice u/s 153A of the Act.
CIT was not justified in exercising power of revision when there was adequate inquiry by the AO and the view taken by the AO is one of the possible views. In this connection, we refer to the decision of the Hon’ble Bombay High Court in the case of CIT vs. Nirav Modi [2016 (6) TMI 1004 - BOMBAY HIGH COURT] wherein it has been held that the CIT was not justified in exercising power of revision where the AO, after due enquiry took one of the possible views. - Decided in favour of assessee.
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2017 (3) TMI 1668 - ITAT AHMEDABAD
Disallowing deduction of depreciation, employees’ expenditure and general administrative expenses - Held that:- No business activity was undertaken by the assessee so as to generate revenue inasmuch as neither golf course was ready nor any membership was enrolled nor any business activity was undertaken. Assessee was at a very early stage of completion of golf courses, therefore, it cannot be held that assessee's business activity had commenced. Find merit in the arguments of the learned DR that expenses connected with office, personal, administrative expenses cannot be allowed to the assesseee, they are to be capitalized. Revenue's appeal is allowed.
Allocation of expenditure - headwise allocation to land proportion - Held that:- CIT(A)’s order exceeds this tribunal’s observations from going beyond headwise allocation to land proportion. We observe in these facts that the said proportion formula is not a full proof one as both these are distinct projects of residential township and a championship golf course. We thus direct the Assessing Officer to strictly allocate expenditure in question proratawise of the two projects without taking into account the land component therein. He shall finalize the consequential computation going by the gross amount of expenditure vis-à-vis the two heads and the proportion involved therein. The assessee’s third substantive ground in all of its appeal is accordingly accepted for statistical purposes
Capitalization of expenditure disallowed on account of non commencement of business - Held that:- CIT(A) has erred in not specifically adjudicating its plea that if the above stated expenditure had to be disallowed on account of non commencement of business and it ought to be capitalized, corresponding income of each assessment year has to be directed to be adjusted against such cost of the two projects. Learned Departmental Representative fails to dispute the above non-adjudication in the CIT(A)’s order. We however are of the opinion that this issue requires a detailed adjudication at assessing authority’s level first
Additions of unexplained investments - Held that:- CIT(A) has already examined Assessing Officer’s conclusions in light of assessee’s disclosure during search as spread over to various assessment years to be already more than the amounts in question. Assessing Officer presumed the assessee to have paid the on money in question in respect of all of its land purchased regardless of the survey nos involved and also without indicating any evidence collected during search buttressing such an assumption. Ms. Bhalla fails to indicate any evidence in the case file which could lead us to a conclusion that the assessee has actually paid any on money in respect of all the land purchases. We thus find no merit in Revenue’s argument even quoting Section 292(C) of the Act. Shri Soparkar at this stage states very fairly that the assessee does not wish to press for its pleadings in the above cross objections keeping in mind the fact that we have already upheld CIT(A)’s order deleting the impugned additions in principle.
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2017 (3) TMI 1667 - ITAT MUMBAI
Additions made on account of difference between the original and the revised return - Held that:- Once the AO was given a chance to rebut the evidences produced by the assessee, there was no justification for raising the ground of admitting additional evidences by him - since FAA has followed the procedure has laid down by law the ground raised by AO is dismissed - Decided in favor or of assessee.
Relief in respect of claim of reversal of excess interest capitalised - Held that:- In original return the assessee had capitalised the interest and in revised return treated it as revenue expenditure - since AO had not commented upon the claim made by the assessee while filing the remand report, neither he had not brought any evidence on record to prove that expenditure was of capital nature - ground raised by AO is dismissed - Decided in favor or of assessee.
Material cost variance and exchange rate variance allowance in the revised return - Held that:- As already discussed the issues of furnishing of additional evidences, calling for remand report by the FAA, and offering of no comments by the AO in the report about the various items of income/ expenditure - since the claim of the assessee is supported by the audited accounts - expenditure under both the heads are allowed - Decided in favor of assessee.
Loss on pursuance of fixed assets and intangible assets - Held that:- We find that the assessee itself had stated that amount in question was not allowable. Therefore, in our opinion,the FAA was not justified in allowing the claim. Reversing his order, we decide ground number five in favour of the AO.
Whether the cost of insuring the project has to be capitalised in the books of account? - Held that:- the expenses incurred by the assessee were for running the project - FAA had disallowed 50% of the expenditure incurred under the head insurance expenses - thus there is no contention with AO that project was a new project and the expenses were to be capitalized - ground raised by AO is dismissed - Decided in favor of assessee.
Addition in respect of the electricity duty - Held that:- Payment made by the assessee was on account of inspection charges, that same was allowable as revenue expenditure, that the same was outside the purview of section 43B of the Act.
Set off of brought forward losses/ unabsorbed depreciation allowable - Held that:- There was a demerger of MSEB and trifurcation into three new entitles, including that of appellant - thus in terms of section 72A( 4) r. w.s. 2(19AA) of the Act, the appellant was entitled for benefit of set off of balance b/f. losses / depreciation of MSEB against its income - Decided in favor of assessee.
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2017 (3) TMI 1666 - ITAT MUMBAI
Transfer pricing - Selection of comparables for international transaction of contract research and testing services - Held that:- Celestial Labs is not functionally comparable to the assessee as it is also in the field of research in pharmaceutical products and should be considered as comparable - AO has not followed the directions of the DRP fully - assessee is permitted to raise all the legal and factual issues before the DRP and may also submit the order of the Tribunal before the DRP for its consideration - DRP shall decide this issue afresh - appeal filed by the assessee is treated as allowed, for statistical purpose
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2017 (3) TMI 1660 - ITAT MUMBAI
Arm’s Length Price(ALP) for the transactions pertaining to investment advisory services - exclusion of four comparables - Held that:- In view of the proposition in Quark Systems P. Ltd. [2009 (10) TMI 591 - ITAT, CHANDIGARH] we are unable to accept the contention of the learned CIT-DR that assessee is precluded from contesting a comparable which initially figured in its own set of comparables, provided the assessee gives a cogent reason for exclusion of certain comparables based on FAR analysis and also on the basis of judicial pronouncements. In such cases there cannot be estoppels on objecting the inclusion/exclusion of such comparables.
Assessee company is engaged in providing ‘non-binding investment advisory services’ to its Associate Enterprise (AE), viz., J P Morgan Securities (Asia Pacific) Limited, Hong Kong and J P Morgan Chase Bank N.A. Mumbai Branch,thus companies functionally with that of assessee need to be deselected from final list.
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2017 (3) TMI 1658 - ITAT BANGALORE
Denial of deduction u/s 10B - claim not allowable to the assessee in respect of the production of non-EOU unit - Held that:- The claim of deduction under Section 10B of the Act cannot be denied merely on the ground that the iron ore excavated from the mining area belonging to EOU got processed through its plant and machinery located outside the bonded area. Further the raw material as well as the finished product both belong to assessee and exported by the assessee therefore, there is no violation of any condition as provided under Section 10B of the Act for claim of benefit of deduction under Section 10B of the Act. Accordingly, we set aside the orders of the authorities below on this issue and allow the claim of the assessee. - Decided in favour of assessee.
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2017 (3) TMI 1656 - ITAT MUMBAI
Estimating the gross profit @ 12.5% of the unproved purchases - Held that:- As relying on case of Imperial Imp & Exp.[2016 (3) TMI 1095 - ITAT MUMBAI] AO was not justified in making additions merely on the basis of information obtained from the Sales Tax Department of the Government of Maharashtra without conducting any independent enquiries. Before the CIT(Appeals), one of the points raised by the assessee was with respect to an opportunity to cross examine the parties, but we find that no such opportunity have been allowed. Considering all addition to made by the Assessing Officer is to be set aside - Decided in favour of assessee.
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2017 (3) TMI 1645 - ITAT CHENNAI
Addition of surplus/profit on sale of agricultural lands under the head 'capital gains' - nature of land - applicability of exceptions carved out in the definition of 'capital asset' in section 2(14)- Held that:- When the assessee submitted the evidences to prove that the land in question was agricultural land and the crops were grown in the form of coconuts and mangoes burden shifts on AO to prove with the documentary evidence that the land was not used for the agricultural purpose or no agricultural operations were carried out in the subject land. Agricultural income is exempted income and merely because the assessee has not returned agricultural income and no expenditure was claimed for agricultural expenses cannot be conclusive proof to hold that subject land was not agricultural land. The assessee’s explanation that the agricultural income is exempted income and due to non-declaration agricultural income no expenditure was claimed appears to be reasonable Explanation.
Records are showing that the lands are agricultural land, classified as dry land for which Kisthu has been paid and falls far exclusion from the definition of capital asset u/s.2(14) of Income Tax Act. Thus land in question sold by the assesse was agricultural land and cannot be held as capital asset and no capital gains are chargeable - Decided in favour of assessee
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2017 (3) TMI 1643 - ITAT, MUMBAI
Denial of loss from business income - Held that:- CIT(A) while considering this ground of appeal observed that the assessee could recover ₹ 89,216/- in February 2011 and the same is offered in income of AY 2011-12. CIT(A) referred that for claiming the deduction as bad debts, the assessee has satisfied two condition; (i) amount claimed as bad-debt which has been offered in income in current year or earlier year (ii) The amount is actually written off in books. CIT(A) further concluded that the assessee has not fulfilled the condition no.1. The assessee has not offered in the income in any of the year. The alternative plea of assessee was not examined by the ld CIT(A) under section 37 of the Act, holding that specific provision will override the general provision. We are unable to agree with his view, since section 36(1)(iii) and section 37 operate in different field. Thus, we admit the plea of assessee to consider the allowability of loss under section 37 of the Act and restore the issue to the file of AO. - Decided in favour of assessee for statistical purpose.
Taxing the gift received from Dinesh J. Shah HUF u/s. 56 - Held that:- The Hyderabad Tribunal in ITO vs. Dr. M. Shobha Ravhuveera [2014 (5) TMI 41 - ITAT HYDERABAD] while considering the identical ground hold that HUF is nothing but the group of relative. Merely because it has given a legal status as a HUF, the individual do not lose their identity as relative and such group of relative, who are member of HUF clearly falls within the definition of term 'relative' as prescribed in the Explanation to Clause-5 of sub-section 2 of section 56 - Decided in favour of assessee
Treatment of gift from Pankaj J Shah HUF as income under the head 'income from other source' - assessee explained that Pankak J Shah HUF consist of Pankaj J Shah ( brother of assessee's father), Mrs Bharti P Shah ( wife of Pankaj J Shah) and Amish P Shah ( son of Pankaj J Shah) and Mrs. Bharti Shah/ Cousin of assessee. However - Held that:- In our intervention that if there is any decision in his favour on this issue, since the assessee is not a member of Pankaj J Shah HUF. The ld AR for the assessee fairly conceded that this gift received from Pankaj J Shah HUF in wherein the assessee is not a member. And some of the members are not covered by the definition of 'relatives' as prescribed under section 56(2)(vi) of the Act. - Decided against assessee
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2017 (3) TMI 1641 - ITAT MUMBAI
Penalty u/s 271(1)(c) - disallowance of such bogus purchases from the purchases accounts - Held that:- From the orders of the AO, it is obvious that the officers suffer from ambiguity as to which limb of the clause-(c) of section 271(1) of the Act should be invoked. The relevant addition is undisputedly the disallowance of such bogus purchases from the purchases accounts and the same was not properly understood in the light of clause-(c) of section 271(1) of the Act.
Penalty should be clear as to the limb for which it is levied and the position being unclear here the penalty is not sustainable - Decided in favour of assessee.
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2017 (3) TMI 1640 - ITAT AHMEDABAD
Rejecting application for registration u/s 12AA - proof of charitable purposes - object of trust - registration certificate of Gujarat State Wakf Board - Held that:- We noticed that the assessee trust is based on religious tenets under the Quran and according to the religious faith of Islam. Further we noticed that assessee trust has been reristered with the Gujarat State Wakf Board as per Bombay Public Trust Act, 1950.
As per the object of the Wafk surplus income after meeting the administrative expensesand repair work of wakf assests would be used for all the purposes(Religious or charitable). We have noticed that The Wakf Act, 1950, applicable for all over Gujarat State and as per the provision of this act Gujarat state Wakf Board has registered the assessee trust since 1992.
As gone through the registration detail mentioned under the particulars as wakf name and address, Shiya and Sunni, Mutvalli/Manager’s name and address, Objects of the Waqf, how to appoint manager and address of Wakf etc.. The above mentioned information and documents indicate the existence of trust as per the registration certificate of Gujarat State Wakf Board which certify the object of the trust, appointment of managers etc. as elaborated above in this order, therefore, we considered that looking to the nature of trust no separate trust deed is required. In view of above mentioned facts and legal findings, we do not justify the decision of DIT(E) to reject the application of the assessee trust u/s. 12AA of the act therefore, the appeal of the assessee is allowed.
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2017 (3) TMI 1639 - DELHI HIGH COURT
Benchmarking of management fee - payment of royalty - MAM - CUP OR TNMM - Held that:- This Court is of the opinion that having regard to the previous decision in EKL Appliances [2012 (4) TMI 346 - DELHI HIGH COURT] as held we are of the opinion that once TNMM has been applied to the assessee company's transaction, it covers within its ambit the royalty transactions in question too and hence the Department's contention for applying the CUP method is erroneous. The ratio of which was correctly applied, no substantial question of law arises. On the first issue, i.e. management fees, the matter stands remitted by the ITAT. The appeal is accordingly dismissed with the pending application.
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2017 (3) TMI 1638 - ITAT MUMBAI
Revision u/s 263 - as per CIT-A the status of assessee being Non Resident was accepted by AO as per claim of the assessee without any submissions by assessee with respect to stay in India during previous year relevant to the assessment year - Held that:- Hon’ble Supreme Court in the case of Malabar Industrial Company Limited v. CIT (2000 (2) TMI 10 - SUPREME Court) held that if the AO has accepted the entry in the statement of account filed by the taxpayer without making enquiry and application of mind , the said order of the AO shall be deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue.
The facts of the case of the instant case are similar to the facts in the case of Malabar Industrial Co. Limited(supra) whereby no enquiry/verification is made by AO whatsoever with respect to residential status of the assessee as well as his holding of the bank account in Switzerland with HSBC at Geneva during relevant previous year and the same was accepted based on submissions of the assessee without application of mind as well without any verification/enquiry being made by the AO. Thus, in our considered view learned Pr. CIT rightly invoked provisions of Section 263.
The assessee in her affidavit has averred that the assessee has filed an RTI application with FRRO on 05-11-2015 to obtain her entry into and out of India to confirm her residential staus. The assessee has also averred that she has lost her passport no Z003983 dated 26/12/2006 issued at Bahrain by Indian Consulate which was duly reported to Ministry of Interior at Kingdom of Bahrain , their certificate, but in our considered view, this is irrelevant as her residential status is to be determined u/s 6 of the Act w.r.t. previous year relevant to assessment year 1996-97 which is a relevant assessment year and any passport which is issued post this period i.e. in this case passport no Z003983 issued on 26-12-2006 is totally irrelevant to determine residential status of the assessee for assessment year 1996-97 under consideration . - Decided against assessee.
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2017 (3) TMI 1637 - KARNATAKA HIGH COURT
Extension of stay - condition on the petitioner to pay an amount of ₹ 15 Crores to the Income Tax department for the assessment year 2011-2012, while extending the stay order for a period of 180 days or till the disposal of the appeals whichever is earlier - Held that:- A perusal of the interim order clearly reveals that the appeals have not been decided for no fault of the petitioner. The appeal is not being concluded as one or the other member has left the Tribunal. Since, the fault does not lie on the part of the petitioner, for the non-conclusion of the appeals, since the circumstances have not changed, prima-facie the learned Tribunal is not justified in imposing the condition that the petitioner should deposit ₹ 15 Crores for the assessment year 2011-2012. Therefore, this Court stays the imposition of the said condition.
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2017 (3) TMI 1626 - ITAT PUNE
Transfer pricing adjustment - international transaction entered into by the assessee with its associate enterprises - benchmark of international transaction - MAM selection - TPO made adjustment after rejecting the claim of aggregation and also while applying the TNNM method had compared the same with internal comparables i.e. domestic sales made by the assessee - Held that:- Primary activity of assessee was to manufacture and sell IC engines and components both for domestic market and for exports, then the activity of importing engine parts and components, payment of royalty for getting know-how, provision of miscellaneous service i.e. procurement support services to the associate enterprises to help the sourcing of components, receipt of IT support services, design services and payment of technical know- how fees, etc. is closely linked to the export of manufactured IC engines. The principle of aggregation of closely linked transactions for undertaking benchmarking analysis applying TNNM method has been approved by the Hon'ble High Court of Delhi in Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT [2015 (3) TMI 580 - DELHI HIGH COURT]. Accordingly, we hold that for benchmarking international transactions, various activities undertaken by the assessee under the head 'manufacturing activities' need to be aggregated. The Assessing Officer / TPO is directed so.
Difference in gross profit margins by AO as against difference in net profit margins between sales to associate enterprises and sales in domestic market - Held that:- The Tribunal in view of the detailed reasoning of CIT(A) observed that the addition made by the Assessing Officer on account of division of difference in gross profit margins by the Assessing Officer as against difference in net profit margins between sales to associate enterprises and sales in domestic market, no addition is warranted. The Tribunal decided the issue as per provisions of Rule 10A(d) of the Rules and deleted addition. Applying the said principle, we direct the Assessing Officer / TPO to re-compute the adjustment, if any, in the hands of assessee on account of international transactions. It may be pointed out herein itself that the adjustment was made in the hands of assessee in HHP Division only and no adjustment was made in LHP division.
Perusal of details of administrative expenses reflects that certain expenses i.e. like depreciation, rent, rates, repairs & maintenance, taxes and other expenses have not been allocated at all to the export division, by the assessee. The assessee claims that depreciation and other expenses on plant & machinery were already included in the cost of goods sold and the non- allocation if any, does not affect cost. In the totality of the above said facts and circumstances, we find no merit in re-allocation of administrative expenses and selling & distribution expenses by the Assessing Officer / TPO.
Methodology adopted by the TPO in application of net profit to cost as PLI - Held that:- We find merit in the plea of assessee in this regard that where the assessee is engaged in the manufacture of components and the main aim of undertaking was to sell the said components, then it is the sales which derive the profitability and not the cost of components. Accordingly, while determining the PLI, the TPO is directed to adopt net profit to sales in order to benchmark the international transactions.
TPO ignoring interest received on extended credit while computing segmental profitability of exports to associate enterprises - Held that:- Since the same is linked to exports to associate enterprises, the same should be considered for ascertaining the segmental profitability of exports to associate enterprises.
Benchmarking the receipt of commission from associate enterprises - Held that:- There is no merit in the adjustment made by the Assessing Officer / TPO in respect of international transactions relating to receipt of commission from associate enterprises. Accordingly, we direct the Assessing Officer to delete the same. See Tecnimont ICB (P.) Ltd. v. Asstt. CIT 2011 (2) TMI 107 - ITAT MUMBAI.
Adjustment made under the head 'financing activity', wherein the assessee was in receipt of interest for extended credit period facility - Held that:- LIBOR + rates have to be applied to the amounts due from associate enterprises for the extended period of credit and the extended period of credit. The Assessing Officer is directed to follow our directions in iGATE Computer Systems Ltd. (2015 (5) TMI 970 - ITAT PUNE) to adjudicate the issue after affording reasonable opportunity to the assessee.
Disallowance of incremental provision for New Engine Performance Inspection Fee (in short "NEPI Fee') - Held that:- the assessee was following a scientific basis for making the aforesaid provision which is not a contingent expenditure as the provision is made in relation to the IC Engines sold by the assessee. The assessee no doubt is making the provision and after the lapse of the period of inspection in case the expenditure has not been necessitated then the same is written back. In the totality of the above said facts and circumstances, we find merit in the plea of the assessee and allow the claim of the provision made for any NEPI fee. It may also be pointed out that the inspection and servicing is different from warranty which is to be taken care of in case of failure of the Engine or its Components during the period of warranty. Accordingly, we allow the claim of the assessee
Disallowance of incremental warranty provision - Held that:- We find no merit in the stand of the authorities below in this regard wherein the assessee is following a scientific basis in claiming the said expenditure and as in the case of NEPI fee, the provision made by assessee is to be allowed as the amount is relatable to the IC Engines sold by the assessee. The warranty clause is part of the contractual obligations of the assessee and the same is an ascertained liability being determined on a scientific basis and hence the same is to be allowed as an expenditure in the hands of the assessee.
Disallowance of expenses u/s.14A - Held that:- no disallowance out of interest expenditure is to be made in the hands of assessee as the assessee has sufficient funds and even otherwise the provisions of Rule 8D are not applicable to the instant assessment year. Now coming to the administrative expenses, following the precedent in assessee's own case, we restrict the disallowance to ₹ 2 lakhs.
Re-working of deduction under section 80IB - Held that:- Even though the Daman unit was working independently, but there is merit in the orders of the authorities below in allocating the directors expenses and part of administrative expenses to the eligible industrial undertaking and re-work the deduction under section 80IB of the Act.
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2017 (3) TMI 1617 - ITAT MUMBAI
TDS u/s 194C - TDS liability - Held that:- Contentions of the assessee requires re-consideration as the Assessing Officer has picked up the payment made for assessment year 2012-13 for fixing the liability of the assessee for the impugned assessment year. However, we make it clear that if the assessee's claim that the payee TAM Media Research Pvt. Ltd. has offered the amount as income and paid tax on such amount, the assessee cannot be treated as a assessee in default in respect of such payment. Similarly, the Assessing Officer must examine assessee's claim made in respect of provisions made of ₹ 5 lakh which was subsequently reversed. Another glaring error committed by the Assessing Officer which has come to our notice is, though, the Assessing Officer in the impugned order has mentioned that the payments were made to Star India Pvt. Ltd., however, from the details submitted by the assessee, we do not find any payment made to Star India Pvt. Ltd. This fact also requires verification. Thus restore the matter back to the file of the Assessing Officer for considering afresh
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2017 (3) TMI 1615 - ITAT DELHI
Addition on account of Notional ALV of unsold flats/spaces - Held that:- This ground is to be decided against the assessee because the Delhi Bench of ITAT and Hon’ble Delhi High in the assessee’s own case for assessment year 1994-95 to 1998-99 [2009 (10) TMI 49 - DELHI HIGH COURT] has rejected the assessee’s plea on this count. Accordingly, ground no.1 is dismissed.
Denial of deduction u/s 80IB(10) – Held that:- There could not be any dispute as regards non-compliance of clause (a) to section 80IB(10). Now, coming to the second ground for rejection of assessee’s claim on the ground of some units being of more than 1000 sq.ft., we find that this issue has also been considered in earlier year’s appeal and proportionate deduction was allowed. Therefore, for the sake of brevity, we do not repeat the same.
Non-fulfilling of the condition of completion of units is concerned, the contention of ld. counsel is that the amendment is prospective. However, he has also pointed out that in the case of assessee, all the projects were completed before the terminal date of completion and completion certificate were also received for majority of the units/houses. Therefore, we do not consider it necessary to go into the issue regarding amendment being prospective or not. The claim of assessee is that actually it has complied with the condition as per amended provisions. The Assessing Officer is directed to verify this aspect and allow the claim in accordance with law. In the result, this ground is partly allowed for statistical purpose.
Benefit of section 23(1)(c) - Held that:- This provision is applicable in respect of let out/ letiable property. However, in the present case, admittedly, the assessee was holding various commercial and residential flats and spaces for being sold to the prospective buyers. The assessee in its reply, inter-alia, clearly stated that spaces/flats formed part of stock-in-trade of the assessee company as the same was for business purposes and was kept in self possession till the time it was sold. The vacant possession thereof was handed over to the buyers on sale. Thus, the assessee never claimed that the properties were letiable properties and, therefore, assessee cannot get the benefit of section 23(1)(c). The next objection of the assessee is in regard to determination of annual letting value in respect of farm lands.
No findings have been recorded in this regard by lower revenue authorities, as to whether annual letting value could be determined in respect of such farm lands in terms of section 22 or not. We may observe that if there was no building on farm lands then it will not come within the ambit of section 22. On this aspect, the Assessing Officer is directed to examine the issue afresh.
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2017 (3) TMI 1614 - BOMBAY HIGH COURT
Appeal admitted on question 5
Whether on the facts and circumstances of the case and in law, the Tribunal has erred in confirming the action of the CIT(A) of calculating the adjustment made to the ALP after giving credit of 5% margin u/s 92C even when the same is not a standard deduction and cannot be reduced from the ALP determined for the purpose of adjustment ?
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2017 (3) TMI 1612 - ITAT KOLKATA
Addition of bogus purchase - CIT-A deleted the addition admitting additional evidence - Held that:- Lot of fresh evidences were furnished before the First Appellate Authority in respect of purchase account, sundry creditors, salary and wages to artists and other staff, security deposits account. That, however, these evidences were not sent to the AO asking for a remand report on the basis of such evidence adduced in compliance with Rule 46A of the Income Tax Rules, 1962 in effect the views and adjudication by the AO was not complied with so far as these fresh evidences are concerned. In the interest of natural justice, the matter is set aside to the file of the AO for reassessment de novo after affording reasonable opportunity of being heard to the assessee and upon considering the fresh evidences to be supplied before him. Appeal of revenue is allowed for statistical purposes.
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