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Showing 121 to 140 of 1515 Records
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2016 (1) TMI 1402
TPO - Comparable selection - rejection of comparables by the TPO merely on the ground that the comparable companies have incurred losses - Held that:- Commissioner of Income Tax (Appeals) has erred in upholding the findings of the TPO in rejecting the Astro Bio Systems Limited, Maars Software International Limited and Megasoft Ltd. only on the ground that the said companies have incurred losses in the comparable year or in the year under consideration. We are of the considered view that the aforesaid three companies should not have been excluded from the list of comparables for arriving at ALP in relation to international transactions. We remit this issue back to the file of Assessing Officer to include the above mentioned three companies in the list of comparable entities and thereafter work out the weighted average mean of the comparables. This ground of appeal of the assessee is accordingly accepted.
Cherry picking of high margin companies - TPO in the final list of comparable has retained M/s. V M F Soft Tech Ltd. which is having profit margin of 35.70%. On the one hand the TPO has rejected loss making companies and on the other hand he has retained a comparable having super profits. The TPO should either have rejected both the comparables or included both the extreme comparable in the list of comparables. Since, we have directed the Assessing Officer to include the loss making companies in the list of comparables, M/s. V M F Soft Tech Ltd. can be retained in the same list, accordingly, this ground of appeal of the assessee is rejected.
Inclusion of Compucom Software Ltd. in the final list of comparables - TPO applied RPT filter of 25% to reject companies having substantial related party transactions - Held that:- The Tribunal in the subsequent assessment year 2007-08 has excluded Compucom Software Ltd. from the list of comparables as it is having related party transactions in excess of 25%. We are of the considered view that the authorities below have erred in not considering the details furnished by the assessee with respect to the related party transactions of Compucom Software Ltd. furnished by the assessee. We deem it appropriate to remit this issue back to the file of Assessing Officer and decide this issue afresh in the light of the order of Tribunal in assessee’s own case for the assessment years 2006-07 and 2007-08. Accordingly, this ground of appeal is allowed for statistical purpose.
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2016 (1) TMI 1401
Addition u/s 14A r.w. Rule 8D - Held that:- We have no doubt that the disallowance u/s 14A r.w. Rule8D (2) (iii) were applicable to the assessment year 2009-10 which is before us however we find a merit in the contention of the assessee that the disallowance has to be worked out on the basis of investments which yielded dividend during the year and not by factoring in the total amount of investments.
In the case of ACB India Ltd. Vs. Assistant Commissioner of Income-tax [2015 (4) TMI 224 - DELHI HIGH COURT] held that while calculating disallowance u/s 14A r.w. Rule8D (2)(iii) only those investments which yielded dividend should be taken into account and not those investments which did not earn any dividend during the year. Thus set aside the issue to the file of the AO with the direction to work out the disallowance u/s14A r.w. Rule8D(2)(iii) by taking those investments which yielded dividend during the year by giving reasonable and proper opportunity to the assessee. - Decided in favour of assessee for statistical purposes.
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2016 (1) TMI 1400
Levy of penalty u/s.271(1)(c) - unexplained investment u/s.69C - Held that:- We find in the instant case the AO has made the addition of ₹ 1,57,500/- as unexplained investment u/s.69C of the Act on the basis of entries in seized documents/accounts found from the premises of Shri Shriram H. Soni. The AO has given cogent reasons while making the addition. We find the Ld.CIT(A) while sustaining the addition made by the AO has given valid reasons which has already been reproduced in the preceding paragraphs. In our opinion, the order of the CIT(A) is a reasoned one and does not call for any interference from our side. We accordingly uphold the same and the grounds raised by the assessee are dismissed.
CIT(A) while confirming the penalty levied by the AO has given a clear cut finding that the assessee has concealed the particulars of his income and also furnished inaccurate particulars of income with regard to payment of interest and brokerage on loan of ₹ 10 lakhs obtained through Shri Shriram Hiralal Soni. He has also given a finding that the assessee has tried to misrepresent the facts by taking grounds which are devoid of facts and merit. There is no other material before us to contradict the factual finding given by the CIT(A) while upholding the penalty levied by the AO u/s.271(1)(c) of the I.T. Act. In our opinion the order passed by the CIT(A) confirming the penalty levied by the AO u/s.271(1)(c) of the I.T. Act, 1961 is a reasoned one and does not call for any interference from our side. - Decided against assessee.
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2016 (1) TMI 1399
Disallowance on account of reimbursement of salary and related expenses made u/s 40(a)(ia) - Held that:- We are of the opinion that the identical issue has consistently been decided by the Tribunal in favour of the assessee. Therefore, respectfully following the earlier orders of the Tribunal on the similar issue as well as following the "principles of consistency", we decide the issue involved in Ground no.2 in favour of the assessee.
Disallowance of expenses on account of shuttering material and depreciation thereon - Held that:- Considering the above, we are of the opinion that the identical issue has consistently been adjudicated by the Tribunal and the matter was remanded in the earlier years. Therefore, respectfully following the earlier orders of the Tribunal on the similar issue as well as following the "principles of consistency", we remand the issue. Ground allowed for statistical purposes.
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2016 (1) TMI 1398
Addition u/s 14A - assessee has not made any claim for exemption - Held that:- Admittedly the assessee has not claimed any exempt income in the instant case. Therefore the ratio laid down in the judgment relied upon by the Learned CIT(A) passed by the Hon’ble Jurisdictional High Court in the case of Corrtech Energy Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT] where the assessee has not made any claim for exemption of any income payment of tax, no disallowance could be made u/s 14A of the Act has rightly been applied by the Learned CIT(A). In the absence of any infirmity in the order passed by the Learned CIT(A), the same is confirmed by us. In the result, revenue’s ground of appeal is dismissed.
Addition on account of disallowance of depreciation on Car - vehicle was not registered in the name of the assessee but in the name of the Directors - Held that:- Judgment passed by the Apex court in the matter of Mysore Minerals-vs-CIT (1999 (9) TMI 1 - SUPREME COURT) also confirms that merely because the vehicles are not registered in the name of the company but in the name of the Directors the assessee cannot be denied of the claim of depreciation. It is not necessary that the vehicle ought to have been registered in the name of the assessee claiming depreciation. Further that it was also pointed out by the Learned CIT(A) that in the assessee’s own case for A.Y. 2010-11 such addition made by the Learned Assessing Officer was deleted. - Decided in favour of assessee
Addition u/s 145A on account of unutilized CENVAT Credit - Held that:- Addition on unutilized CENVAT credit was made u/s 145A of the Act by the Learned AO in assessee’s own case for A.Y. 2010-11 the same was deleted by the first appellate authority holding the said credit cannot be a subject matter of addition u/s 145A of the Act being tax neutral. We find no merit in the case made out by the Revenue neither any infirmity in the order impugned before us. - Decided in favour of assessee
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2016 (1) TMI 1397
Addition made u/s 69A - undisclosed bank account - addition only to the net profit of the excess of deposits over withdrawals instead of peak credit addition - Held that:- We find that no material has been brought on record by the Learned AR to controvert this finding. The action of the CIT(A) in deciding this issue cannot be faulted with. The arguments of the AR that only the net profit of the undisclosed bank account should be brought to tax does not hold any water as in the instant case, there is no material brought on record that the sources for deposits and withdrawals emanate out of the business transactions of the assessee.
We find from the case relied upon by the Learned AR on the decision of Hon’ble Calcutta High Court, there was a clear cut finding recorded by the tribunal that the credits in the undisclosed bank represents undisclosed business receipts and withdrawals made thereon represent undisclosed business expenditure. In these circumstances, the Hon’ble Calcutta High Court affirmed the view of the tribunal to adopt the net profit thereon for the purpose of taxation. The facts in the instant case are squarely distinguishable from facts before the Hon’ble Calcutta High Court. Accordingly, the grounds raised by the assessee as well as the revenue are dismissed.
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2016 (1) TMI 1396
Discharge of Official duties - manifestation of how the career of an IRS Officer has been blighted by litigation between him on the one hand and the official respondents on the other - Whether the sanction order for prosecution dated 26.11.2002 is invalid and in violation of this Court's order in Writ Petition(Criminal) No.938/2001 instituted by the petitioner herein for non- production of relevant material as well as for want of due application of mind by the sanctioning authority?
Maintainability of application - Held that:- It is an established position of law that the court for its perusal and the submissions made by the counsel for the parties, even if the same are in dispute and do not require the taking of oral evidence. Rather, this is a matter of the discretion of the court and not a matter of jurisdiction - Thus, the extent of jurisdiction of the High Court under Article 226 of the Constitution of India is not confined to questions of law. This proposition is well established through a catena of decisions of the Apex Court, noticeably in the landmark decision of Century Spinning and Manufacturing Company Ltd. vs. Ulhasnagar Municipal Council and Anr. [1970 (2) TMI 134 - SUPREME COURT], wherein the Supreme Court set aside the order passed by High Court dismissing a petition in limine where relief was sought against the respondent in that case, whose actions with regard to the Century.
There are no disputed questions of facts. The reply to the LR dated 27.06.2001 as well as the relevant Fax dated 13.01.19998 sent to Mr. Barjatya are conspicuous by their absence in the SP’s Report dated 30.10.2001. It is not surprising, that the order granting sanction also does not allude to either of the afore- mentioned relevant documents, as it is a verbatim copy of the draft sanction order.
This Court is not precluded from determining questions of fact under Articles 226/227 of the Constitution of India, since the dispute arising in the present case can be very well be determined by looking at the official documents and material on record including the pleadings of the parties.
Stage at which the validity of sanction can be determined - Held that:- The legal position that emerges is that the question of validity of a sanction must be decided as soon as it is raised and cannot be postponed to a later stage of trial, as an invalid sanction goes to the very root of the jurisdiction of the court that has taken cognizance. Considering that the cognizance taken by the Special Judge, CBI would be rendered non-est in light of section 19(1) of POCA, the dispute on validity must be adjudicated at the earliest.
The present petition is maintainable under Articles 226/227 of the Constitution of India - decided in favor of petitioner - in the interest of justice, finality is given to these proceedings and it is directed that no further proceedings in relation to the subject sanction orders be initiated against the petitioner.
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2016 (1) TMI 1395
Filing of Counter affidavits - Transfer of right to use the tug or not - Held that:- In view of the importance of the issues that arise for consideration and the fact that any pronouncement from this Court would have far reaching implications not only for Centre-State relationship but the federal character and separation of legislative powers of the Union and the States, it is deemed proper to grant one final opportunity to the defaulting States to file their counter affidavits but only on payment of costs of ₹ 50,000/- by each State in default - List after the counter affidavits have been filed on 6th April, 2016.
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2016 (1) TMI 1394
Addition u/s 68 - unexplained cash credit - identity and creditworthiness and genuineness of the transactions - Held that:- The entries in the bank account clearly demonstrates the factum of realisation of investment in Prabhudan Securities Pvt.Ltd by Kali Saran Properties (P)Ltd and such proceeds being utilised to make investments in share application money of the assessee company. The reasons assigned by the and CIT(A) for making addition u/s 68 are identical as were given while treating the investments by Jai Kali Properties (P)Ltd as unexplained. It is clear from the evidence on record that the assessee has established the identity and creditworthiness and genuineness of the transactions of the receipt of share application money from M/S.Kalisaran Properties (P) Ltd. We, therefore, hold that the addition made by the AO and sustained by CIT(A)should be deleted.
A copy of the source of funds of Jai Kali Properties (P)Ltd and Kalisaran Properties (P)Ltd for making investment in share application of the assessee is given as annexure to this order. In the light of the evidence on record we are satisfied that the action of the revenue authorities while making the impugned addition u/s 68 of the Act cannot be sustained. Accordingly the said addition is directed to be deleted. - decided in favour of assessee.
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2016 (1) TMI 1393
Validity of notice issued u/s 148 - reasons to believe - Held that:- It is evident that action under section 147 has been initiated by revisiting/re-appreciating the very same materials on the basis of which original assessment under section 143(3) was completed. As the AO while completing the original assessment has examined these facts and materials and passed the assessment order after application of mind, the reopening of assessment on the very same set of facts and materials would tantamount to review of the assessment order passed earlier that too on a mere change of opinion which is not permissible under law.
Accordingly, in our considered opinion issuance of notice u/s 148 in the present case is invalid. As a natural consequence the assessment order passed in consequence thereof also has to be declared as invalid and accordingly is to be quashed. Before parting, we may make it clear that the decision rendered by us as above is purely in the context of validity of reopening of assessment under section 147 of the Act and cannot be considered to be a precedent for assessee’s claim of depreciation on GDS and interconnect TAS at the rate of 60% by treating them as a computer. That issue has to be decided according to its own merit in an appropriate case. - decided in favour of assessee.
Grant depreciation on TAS for the full year of the eligible depreciation - Held that:- On a perusal of the order passed by CIT(A) it is observed that after examining the relevant facts and materials on record he has given a categorical finding of fact that interconnect TAS was put to use in July 2000 hence the observation of the AO that it was used for less than six months is not proved on record. D.R. has not brought any material before us to controvert the above said finding of the Ld. CIT(A), we are unable to accept the plea of the Department. Accordingly, this ground is also dismissed.
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2016 (1) TMI 1392
Head of income - treatment to income received in respect of the Amenities Agreement with the lessee of the premises - 'Income from Other Sources' or 'Income from House Property' - Held that:- Since similar facts are permeating in this year also as per earlier AYs [2015 (6) TMI 757 - ITAT MUMBAI] arising out of the same agreement, therefore, no different view can be taken and following the rule of consistency and judicial precedent, we decide this issue against the Assessee by holding that the amenities charges received by the Assessee is to be assessed under the head ‘income from other sources’. Accordingly, ground no. 1 raised by the Assessee is treated as dismissed.
Municipal taxes paid should be allowed against ‘income from other sources’ instead of ‘income from house property’ - it has been again admitted by both the parties that this issue too has been decided against the Assessee by the Tribunal vide same order.
Allowing of certain business expenses - Held that:- The Assessee has claimed various expenses under the head ‘administrative expenses’ which has been claimed out of the income received from providing space and facilities for hosting functions for HSBC Bank. The Assessing Officer held that the Assessee had received hire charges from cinema hall which cannot be treated as business income, therefore, such an expenditure cannot be allowed. On this issue, consistent with the view taken in the earlier year, we also direct the Assessing Officer to decide this issue afresh in line with the directions given by the Tribunal in the earlier year after giving reasonable opportunity to the Assessee. Thus, ground no. 3 is treated as allowed for statistical purpose.
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2016 (1) TMI 1391
Disallowance of Sugarcane Purchases payments - compulsions requiring the appellant to pay farmers a competitive sugarcane price of ₹ 1400/Mt - Held that:- As relying on COMMISSIONER OF INCOME-TAX VERSUS EXXON MOBIL LUBRICANTS P. LTD. [2010 (9) TMI 36 - DELHI HIGH COURT] the amount of ₹ 2,33,30,414/- paid by the assessee towards the additional cost for procurement of sugarcane in season 2008-09 crystallized when the Board of Directors decided to pay the additional cost to the farmers. The management of the assessee company could not have ascertained this expenditure in assessment year 2009-10 - merit in the appeal of the assessee. The appeal of the assessee is accepted to the extent of ₹ 2,33,30,414/- paid towards the additional cost for procurement of sugarcane. - decided partly in favour of assessee.
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2016 (1) TMI 1390
Dismissal of appeal on account of limitation - whether the trial court was right in coming to the conclusion that the suit was barred by limitation? - applicability of Section 14 of Limitation Act 1963 - Held that:- The trial court in the impugned judgment, has not discussed this aspect of the matter at all. Therefore, the impugned judgment is flawed, on this count.
Applicability of Section 14 of Limitation Act 1963 - Held that:- In a case where sub-section (3) of Section 14 is not applicable, the requirement is that the concerned court should be unable to entertain the civil proceeding on account of "defect of jurisdiction" or "other cause of a like nature". There is a subtle but a clear distinction in the two provisions. Where sub-section (3) of Section 14 is triggered, the court must come to the conclusion that the suit would "fail" on account of defect of jurisdiction or other cause of a like nature. The expression, that the suit must fail by reason of some formal defect, finds a mention in Order 23 Rule 1(3) clause (a) of the CPC, as well. In my opinion, the setting, in which, the expression, defect in jurisdiction of the court or other cause of a like nature, appears in sub-section (3) of Section 14 is, perhaps, not the same as that which pertains to a somewhat similar expression, i.e. defect of jurisdiction or other cause of a like nature, which, stand incorporated in sub-section (1) of Section 14.
The expression, "or other cause of a like nature" need not necessarily have the same connotation as that which one may give to the very same expression appearing in sub-section (3) of Section 14. It is not the likeness of the expression but the setting in which the expression is found incorporated, which is of greater relevance.
Therefore, if the time spent by the appellant in prosecuting the writ remedy (i.e. between the date of institution of the writ and its withdrawal) is excluded, which must be so, then, the suit could not have been dismissed on the ground of limitation.
Appeal allowed.
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2016 (1) TMI 1389
Estimating the net profit @ 8% on the total contract receipts - the assessee submitted that these contract receipts of ₹ 75,79,683/- were not from the contract receipts ₹ 29,52,668/- have been received from the material supplied - Held that:- We find force in the pleadings of the learned counsel for the assessee. Therefore, on the receipts for the supplied material, direct to adopt rate of 5%. Ground no. 2 is thus partly allowed.
Addition on account of cash credit u/s 68 - as per assessee this amount was reflected even in the balance sheet for the financial year ending on 31st March, 2008 - Held that:- We side the issue to the file of Assessing Officer to verify the correct facts and decide the same afresh after hearing the assessee on this issue.
Addition made u/s 69 on account of unexplained investment - Held that:- Once the income has been estimated by taking net profit rate of 8% on contract receipts and 5% on the material supply Ghanshym Sharma then there was no justification in making further addition.
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2016 (1) TMI 1388
The Supreme Court of India condoned the delay and granted leave in a case referenced from the Delhi High Court (2014). Justices Anil R. Dave, Shiva Kirti Singh, and Adarsh Kumar Goel were presiding. Counsel for the petitioner were Mr. Ajay Vohra and Ms. Kavita Jha.
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2016 (1) TMI 1387
Availment of wrong credit - credit reversed and was not at all utilized - Held that:- The unutilized credit was reversed for which there was no prejudice caused to Revenue. Therefore, calling for interest shall serve no useful purpose of law when interest of Revenue was not prejudice - appeal allowed.
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2016 (1) TMI 1386
Disallowance u/s 14A - Held that:- We find that the Hon’ble Court has in the case of Godrej Agrovet Ltd.(2014 (8) TMI 457 - BOMBAY HIGH COURT) Nhas laid down certain guidelines with regard to disallowance to be made u/s.14A of the Act r.w. rule 8D. In our opinion, in the interest of justice the matter should be restored back to the file of the AO for fresh adjudication. He is directed to decide the issue after affording a reasonable opportunity of hearing to the assessee and after the considering the cases relied upon by the AR before us ,including the matter of Godrej Agrovet Ltd.(supra). Effective ground of appeal is decided in favour of the assessee, in part .
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2016 (1) TMI 1385
The Supreme Court of India issued an order to list matters before a bench excluding one of the justices. Justices V. Gopala Gowda and Uday Umesh Lalit presided over the case. Petitioner represented by multiple advocates including Ranjit Kumar and Respondent represented by K.K. Venugopal.
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2016 (1) TMI 1384
Prayer to the official respondents to entrust a fresh investigation into the episode by the C.B.I. - the appellant since after the murder of her husband had been persistently appealing for investigation by any impartial agency i.e. CBI, expressing without reservation, her doubts about the genuineness and bona fide of the probe being conducted by the state police.
Held that:- The present factual conspectus leaves one with a choice either to let the ongoing trial casually drift towards its conclusion with the possibility of offence going unpunished or to embark upon investigation belated though, spurred by the intervening developments, to unravel the truth, irrespective of the persons involved. As it is, every offence is a crime against the society and is unpardonable, yet there are some species of ghastly, revolting and villainous violations of the invaluable right to life which leave all sensible and right minded persons of the society shell shocked and traumatized in body and soul. Such incidents mercifully rare though are indeed exceptionally agonizing, eliciting resentful condemnation of all and thus warrant an extra-ordinary attention for adequate remedial initiatives to prevent their recurrence.
In our considered view, even if such incidents otherwise diabolical and horrendous do not precipitate, national or international ramifications, these undoubtedly transcend beyond the confines of individual tragedies and militatively impact upon the society’s civilized existence. If the cause of complete justice and protection of human rights are the situational demands in such contingencies, order for further investigation or reinvestigation, even by an impartial agency as the CBI ought to be a peremptory measure in the overwhelming cause of justice.
Notwithstanding the pendency of the trial, and the availability of the power of the courts below under Sections 311 and 391 of the Code read with Section 165 of the Evidence Act, it is of overwhelming and imperative necessity that to rule out any possibility of denial of justice to the parties and more importantly to instill and sustain the confidence of the community at large, the CBI ought to be directed to undertake a de novo investigation in the incident - appeal allowed.
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2016 (1) TMI 1383
Arbitration and Conciliation (Amendment) Ordinance 2015 - Ordinance was repealed by the Arbitration and Conciliation (Amendment) Act 2015, which received the assent of the President on 31st December, 2015 and was published in the Gazette of India on 1st January, 2016 - enforce-ability of an award during pendency of a setting aside application - Held that:- Section 36 of the 1996 Act only stipulated that the award would be enforced in accordance with the Code of Civil Procedure. This simply meant that the award would be executed in accordance with the provisions in that behalf in the said code. There is nothing in the Chapter relating to execution in the Civil Procedure Code which provides for taking security from a judgement debtor - the repeal and savings clause of the Amendment Act of 2015 did not make applicable the amendment Act in case of arbitration which commenced before its enactment. Since the subject arbitration commenced much prior to coming into force of the Amendment Act, nothing in it applies to the subject arbitration.
The law in force before 31st December, 2015 did not recognise taking of security from the award debtor for staying of operation of the award. The award was stayed automatically upon "making" of the application to set aside the award.
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