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Showing 181 to 200 of 1478 Records
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2016 (3) TMI 1306
Addition on account of milling gain - assessee did not appear despite having knowledge of the date of hearing - Held that:- We have carefully examined the order of the ld. CIT(A) with regard to the grounds raised by the assessee and we find that the ld. CIT(A) has adjudicated the issues involved in the impugned grounds in detail in the light of assessee’s contentions. Since no infirmity is noticed in the order of the ld. CIT(A), we confirm the order of the ld. CIT(A). - decided against the assessee.
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2016 (3) TMI 1305
TPA - Non consideration of the Cost Accountants allocation of costs between AE and NON AE segments - TPO did not accept the same observing that the same was not audited - Held that:- The cost allocation between AE and Non AE segments by the Cost Accountant has been audited and the same has also been reported by the statutory auditor. The segmental details furnished by the assessee are reproduced at para 4.10 of the DRP’s order. A perusal of the same shows that a sum of ₹ 1069.80 lakhs has been shown as unallocated costs. According to the assessee, this pertains to the unutilized capacity. The assessee has specifically stated so before the DRP. But DRP proceeded to allocate the unallocated expenditure between the AE and Non AE without specifically dealing with the contention of the assessee. Correct allocation of expenditure amongst various segments of the assessee’s transactions has to be done to arrive at the correct PLI.
In the case before us, the revenue is seeking to interfere with the cost accountants report as the adjustment towards under utilization of the capacity has not been allowed both by the TPO as well as the DRP. Therefore, this issue would depend on the decision taken on whether the adjustment for under utilization of the capacity is allowable or not.
Denial of Capacity Utilization adjustment and depreciation adjustment respectively - TPO and the DRP have disallowed these adjustments on the ground that the assessee was a contract manufacturer and therefore the prices at which the goods were supplied to AE cannot go below the agreed price as stipulated in the agreement with its AE - Held that:- the adjustments of under utilization of the capacity and the difference in the depreciation are the factors which are likely to materially affect the price or cost charged or paid, or the profit arising from, such transactions in the open market. Therefore, we direct the AO/TPO to allow the adjustments on account of under-utilisation of capacity and also difference in depreciation method adopted by the assessee and the comparable companies. Since we have held that the adjustment for the under utilization of capacity is allowed, the issue of apportionment of unallocated expenses also needs to be allowed. How much of the un allocated costs do really pertain to under utilization and nature of such costs unallocated were not examined either by the TPO or the DRP and neither are the details filed before us. Consequently, TPO has to examine and consider to what extent the claim can be allowed. The AO/TPO are accordingly directed to re-compute the ALP after allowing the above adjustments after due verification.
Disallowance of loss on account of the directions passed by the DRP - Held that:- we find that Article 265 of the Constitution of India allows the Revenue to levy taxes but only in accordance with law. If during the course of assessment proceedings, it is found that the assessee is eligible for deduction in excess of the sum claimed by it in the return of income, it does not amount to a fresh claim. In our opinion, the Assessing Officer has erred in holding it to be a fresh claim. Therefore we direct the AO to verify and allow the claim of the assessee in accordance with law. Ground No.3 is accordingly set aside to the file of the Assessing Officer and treated as allowed for statistical purposes.
Short deduction of TDS - Held that:- We remand this issue also to the file of the Assessing Officer with a direction to verify the claim of the assessee on this aspect and allow the same in accordance with law.
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2016 (3) TMI 1304
Addition made u/s 40A(3) on account of cash payment towards purchase of land - Held that:- where a Developer had made payments to farmers in cash at the time of purchase of land through a registered sale deed executed before Sub Registrar, the component of cash payment was held as admissible and the invocation of the provisions of section 40A(3) was found to be unjust - reliance is placed on ITAT, Raipur Bench in the case of ACIT vs. R.P. Real Estate Pvt. Ltd. [2015 (7) TMI 1283 - ITAT RAIPUR] - thus it was unjust to invoke the provisions of section 40A(3) - we hereby reverse the findings of the authorities below and direct to delete the addition - Decided in favor of assessee.
Whether the expenditure incurred by the assessee for development of land is to be included for the purpose of valuation of closing stock of land - Held that:- method adopted by the assessee was average purchase price - assessee has furnished the calculation of the valuation stock and before the AO he has admitted that at best a difference in stock of ₹ 2,31,360/- could be assessed. This offer of the assessee has duly been recorded in the assessment order - we therefore, hold that after considering the submissions as well as the method of valuation, at best, a sum of ₹ 2,31,360/- could be upheld by CIT(A), instead of granting the total relief - thus AO is directed to compute the addition accordingly - allowed for statistical purposes.
Disallowance made u/s 40A(3) - Held that:- the expenditure was towards purchase of uniform and payment to staff. Each payment was described by the assessee - CIT(A) has examined the expenditure incurred and thereupon arrived at a conclusion that the payments although were in cash but petty in nature - On that basis he has held that the provisions of section 40A(3) were wrongly invoked - Decided in favor of assessee.
Disallowance of expenditure incurred by partners - Held that:- the expenses was incurred for the purpose of travel, pooja expenses, office expenses etc. CIT(A) has held that considering the nature of the business as well as the scale of the business, the expenditure in question was related to the business activities of the assessee - thus CIT(A) has rightly granted relief after considering the nature of expenditure - Decided in favor of assessee.
Disallowance of expenditure - Travelling for marketing - Held that:- CIT(A) has allowed the claim by assigning the reason that in real estate business travelling is required. However, the said reasoning is general in nature as against that the AO had made specific observation that some of the expenditure were connected with the business but personal in nature - thus we hereby uphold the addition to the extent of ₹ 25,000/- and for rest of the amount the relief granted by learned CIT(A).
Disallowance u/s 40a(2)(b) - Held that:- the first onus is on the AO to place on record his satisfaction that the expenditure was in excess of the fair market value. In this case no such attempt had been made by the AO - assessee’s explanation was that the payment of commission was an ascertained liability of the assessee, hence in the interest of business the commission was paid even if the post dated cheques have been received from the customers at the time of booking of the plot - hence the decision of payment of commission appears to be a business decision of the assessee. Moreover, the AO was not justified to invoke the provisions of section 40A(2)(b) in the absence of any evidence to compare the fair market value - Decided against the revenue.
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2016 (3) TMI 1303
Disallowance u/s 40A(3) for payments made in cash exceeding 20,000/- - payment in cash was out of business compulsion and not optional - Held that:- Cash payments above 20,000/- rupees could be accepted if the conditions prescribed in the Rule 6DD(g) were fulfilled to the satisfaction of the authority concerned. The reasoning of the Tribunal and the interpretation by it of Section 40A(3) and Rule 6DD(g) supported by judicial precedents have not been assailed in this appeal and no submission has been made before us with regard to the same - appeal raises no substantial question of law for determination u/s 260A - Hence the appeal is dismissed.
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2016 (3) TMI 1302
Power conferred upon the Tribunal under Section 254(1) to grant interim stay - Held that:- Omnibus power conferred upon the Tribunal under Section 254(1) “to pass such orders as it thinks fit” while deciding an Appeal is reinforced in respect of passing interim orders of stay in the first part of second proviso to sub-section (2A). This ancillary power of the Tribunal to “pass an order of stay in any proceedings related to an appeal filed under sub-section (1) of Section 253,”is subject to the twin requirement that the stay order could be passed for a period not exceeding 180 days and that the Tribunal should dispose of the appeal within that period. In the present case we are only concerned with the power of the Tribunal to grant interim stay as conferred by first part of the second proviso to subsection 2 (A) of section 254 of the Income Tax Act.
The appeal of the assessee is pending before the ITAT and has been listed for hearing along with the stay petition and in fact the hearing has also commenced. There is also no doubt that the issues arising in the stay petition flow directly and substantially from the impugned order before the ITAT and the proceedings sought to be stayed relate to the present appeal filed under sub-section (1) of Section 253. During the course of hearing the Stay Petition which stood reinforced on hearing of the Appeal, we found that the assessee had a prima-facie case for grant of stay as prayed for and an order of status-quo was pronounced on the Bench
As the assessee has made out a prima-facie case for grant of stay, the departmental objection that the ITAT does not have the power to grant stay is misplaced. See case of CIT, Central-II vs ITAT [2012 (8) TMI 166 - DELHI HIGH COURT]
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2016 (3) TMI 1301
Addition u/s 40A - truck loading wages charges paid in cash in excess of ₹ 20,000/- - Held that:- The nature of the business of the assessee is such that assessee has no other alternative except to make payment to labours in cash because that area is not served by any bank and the labours do not receipt the payments by cheque or any other mode except in cash.
The assessee’s payments are genuine and not doubted by revenue. The revenue could not controvert that the assessee’s mine is in tribal area of Orissa where no banking facility is available and labourers do not have any bank account to whom assessee has made payment. Accordingly, in the given facts and circumstances of the case, we delete the disallowance made by AO and confirmed by CIT(A) by invoking the provisions of section 40A(3) of the Act - Decided in favour of assessee
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2016 (3) TMI 1300
Calculating deduction u/s. 10A - Held that:- It is admitted that on a parity of comparison, whatever is reduced from the export turnover has to be reduced from the total turnover and this principle was accepted by the jurisdictional Karnataka High Court in the case of CIT Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] which the Ld CIT(A) has followed. We do not see any reason to interfere with the above.
Comparable selection - TPA - functional dissimilarity - Held that:- Assessee is into Software Devolopement Services thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Treating the expenditure on software licenses as ‘capital in nature’ and not giving credit of TDS by the AO - Held that:- Since the issue is covered in favour of assessee in earlier years, the claim of assessee as revenue expenditure is acceptable. However, as seen from the order of Ld.CIT(A), even after noticing the judgment of jurisdictional High Court he did not grant the benefit in the absence of details. Before us, Learned Counsel submitted that most of the expenditure is on microsoft licenses which are renewable on an yearly basis. This aspect require examination by AO. Consequently, while accepting the principle that software licenses are revenue in nature, examination of expenditure claim is restored to the file of AO. AO after due verification should allow the expenditure accordingly
For claim of tds credit pursuant to decision in COURT ON ITS OWN MOTION VERSUS COMMISSIONER OF INCOME TAX AND OTHERS & ALL INDIA FEDERATION OF TAX PRACTITIONERS VERSUS UNION OF INDIA AND OTHERS [2013 (3) TMI 316 - DELHI HIGH COURT] CDBT issued Instruction No. 5 of 2013, dated July 8, 2013, directing that where assessee approaches AO with requisite details and particulars in the form of TDS certificate as an evidence against any mismatch amount, AO sould verify whether or not the deductor had made TDS payment in the government account and, in the event, the payment had been made, credit of the same would be given to assessee. It is therefore prayed that the AO be directed to verify and allow the entire claim of TDS amounting to ₹ 2,61,44,238/- as claimed by the company in its return of income. Since the issue is one of verification, we direct the AO to undertake the exercising of verification and allow credit.
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2016 (3) TMI 1299
Penalty u/s.271CA - default u/s.206C - additions made u/s.206C(1) on account of non collection of TCS on sale of scrap - Held that:- CIT(A) after relying upon the decision of M/s. Bharti Auto Products [2013 (9) TMI 274 - ITAT RAJKOT] has held that the late submission of Form No.27C and 27BA does not make assessee in default. Since the assessee has not been treated as assessee in default u/s.206C(6) and 206C(7), the question of penalty does not arise. Before us, Revenue has not brought on record any contrary binding decision in its support. - Decided against revenue.
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2016 (3) TMI 1298
Initiation of penalty u/s 271E & 271D - busniss urgency in repayment of loans in cash - Mode of undertaking transactions - Held that:- Assessee has no reasonable cause for accepting loans in cash and repaid the same in cash - cash transactions have not been recorded in the regular books of accounts of the assessee - thus assessee was unable to specify under what circumstances he has borrowed loans in cash and repaid in cash exceeding 20,000/- - thus penalty u/s 271E & 271D is correctly imposed - Decided against the assessee.
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2016 (3) TMI 1297
Carry forward of unabsorbed depreciation - Held that:- Unabsorbed depreciation of AY.1997-98 could be allowed to be carry forward and set off after a period of 8 years in view of the amended section 32(2) of the Act. Respectfully following case of General Motors (I) Pvt.Ltd. [2012 (8) TMI 714 - GUJARAT HIGH COURT] we uphold the order of the FAA in allowing carry forward - Decided in favour of assessee.
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2016 (3) TMI 1296
Claim for exemption u/s 80P(2)(i)(a) - interest earned - Held that:- As relying on Mahaveer Co-op. Union Bank Ltd [2013 (10) TMI 463 - ITAT HYDERABAD] section 80P(2)(a) is given a restrictive meaning as including the interest earned only on the statutory deposits made by a co-operative society, it would amount to supplying a casus omissus and has to be avoided by the court - Investment of funds by banks including the non-reserves is part of banking activities since no bank: would like its reserve funds to remain idle and not earn any interest. Therefore, the interest earned on such deposits is directly attributable to the business of banking and, therefore, exempt under section 80P(2)(a)(i) – Decided against the Revenue.
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2016 (3) TMI 1295
Clandestine removal - absence of tangible evidence to prove that goods removed clandestinely - Held that: - Since the Commissioner (Appeals) has recorded the specific findings that clandestine removal of excisable goods has not been proved by the Department with any tangible evidence and allowed the appeal in favour of the respondent, I do not find it appropriate to interfere with the said findings in the impugned order - appeal dismissed - decided against Revenue.
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2016 (3) TMI 1294
Penalty u/s 271(1)(c) - depreciation claim on income from house property - Held that:- Admittedly, when the assessee was confronted with the depreciation being claimed on the property, the income from which had been returned under the head income from house property, it immediately realized its mistake of computation of total income and agreed for the addition to its total income.
The mistake was inadvertent, is evident from the fact that assessee had furnished return of income of ₹ 3,27,79,273/- and, therefore, there was no reason to make a false claim of a petty sum of ₹ 7,87,734/-.
The property was appearing in the fixed assets schedule along with other properties, therefore, for all practical purposes, it was treated as a business asset and the depreciation was, accordingly, claimed in the books of account. This aspect is not disputed. It was only at the time of computation of income that the assessee should have made the addition to the profits as per P&L A/c because the income from this property was returned under the head income from house property. Under such circumstances it cannot be disputed that human error could have crept into while making the computation. Thus, it is evident that assessee did not misrepresent the facts at any stage of proceeding. - Decided in favour of assessee.
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2016 (3) TMI 1293
Revision u/s 263 - valuation of Tools and Tackles - method of valuation of closing stock of Tools and Tackles - Held that:- A query on the issue of valuation of closing stock of Tools and Tackles was specifically raised by the assessee during the course of assessment proceedings and after having satisfied with the explanation offered by the assessee, the valuation of closing stock of Tools and Tackles as shown by the assessee was accepted by the Assessing Officer.
CIT, D.R. has not been able to controvert or rebut this position which is clearly evident from the record. Having regard to al l these facts and circumstances of the case, we are of the view that there was no error in the order of the Assessing Officer passed under section 143(3) as alleged by the ld. CIT calling for revision under section 263. - Decided in favour of assessee
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2016 (3) TMI 1292
Nature of expenditure on software - revenue or capital - Held that:- The issue is also covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in the case of Raychem RPG Ltd. (2011 (7) TMI 953 - Bombay High Court) wherein it was held that software facilitate assessee’s trading operations or enable the management to conduct assessee’s business more efficiently or more profitably but it is not in the nature of profit-making apparatus. Therefore, expenditure on software was to be allowed. In the instant case also, assessee was in the business of shipping agent, software was used to facilitate assessee’s business of shipping, therefore, there is no reason to treat the expenditure on software as capital.
Addition of closing balance of CENVAT credit on account of unutilized service tax credit u/s 145A - Held that:- Tssue with regard to applicability of Sec. 145A on unutilized service tax credit was considered by the Tribunal in assessee’s own case [2015 (8) TMI 312 - ITAT MUMBAI] as held this section only applies to purchase and sale of goods and inventory for the purpose of valuation of stock on the date of valuation. In the normal circumstances it is at the time of valuation of closing stock and not for the valuation of service contracts. If the provision of section 145A is not applicable on services, then the action of the AO in invoking the provisions of section 145A to make the addition is legally not correct. Accordingly on this reason, the order of the Ld. CIT(A) is set aside and the addition made by the AO is deleted.
Disallowance u/s 14A - Held that:- As there was no exempt income during the year under consideration, therefore, no disallowance should be made. See case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] wherein it was held that no disallowance u/s 14A should be made when there is no exempt income during the year. Thus we delete the disallowance made u/s 14A of the Income Tax Act, 1961. - Revenue appeal dismissed.
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2016 (3) TMI 1291
Claiming cash benefits on sumptuary allowance and encashment of leave and leave salary - recommendations made by Shetty Commission acceptability - Held that:- This is not a matter which can be ironed through the judicial process either under Article 226 of the Constitution or through an intra-court appeal arising from the writ petition. Learned single Judge found that the issue relating to acceptance of Shetty Commission recommendations and its enforcement is no longer res integra. This was stated making reference to the decision of the Apex Court in Maharashtra State Judges Assn. v. High Court of Bombay [2008 (12) TMI 794 - SUPREME COURT ] and to the judgment of this Court in Asha P. v. State of Kerala [2009 (11) TMI 994 - KERALA HIGH COURT].
The learned single Judge rightly refused to accept the contention of the Association that the acceptance of the recommendations of the Shetty Commission Report has to be considered as declaration of law by the Hon'ble Supreme Court for the purpose of its enforcement. Those recommendations are matters which may generate room for relief in cases where no rules have been framed; in which event, the learned single Judge has rightly found that the remedy does not lie before this Court.
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2016 (3) TMI 1290
Validity of demand notice - BVAT Act - Section 31(1) of the Bihar VAT Act - Held that: - It is evident from the pleadings of the parties that certain contentions have been raised by the petitioner regarding non-revision of the MRP on the bottles and in particular the reply of the petitioner that the sale had been made at a much lower price on the basis of old MRP printed on the bottles.
The impugned assessment order does not clearly indicate whether the revised MRP was printed on the bottles or not and the levy of VAT-3 has been made on the basis of actual sale price at which they have been sold and not the MRP as printed on the bottles, which cannot be the basis for levy of sales tax. The petitioner having made clear that the sale had been made at a lower price than the revised MRP then the respondents are obliged to pass order under Section 31(1) on the basis of actual sale price at which the goods had been sold - he impugned orders are quashed with a liberty to the respondents to proceed afresh in the matter.
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2016 (3) TMI 1289
Offences punishable u/s 120-B r.w. 420, 409, 477-A IPC and Section 13(1)(C & D) of the Prevention of Corruption Act, 1988 - Whether the petitioner/A3-Srinivasan, being the Vice-Chairman and Managing Director of M/s. India Cements Limited (A7), be made personally liable for any acts of India Cements Limited with vicarious liability for the offences punishable under Sections 120-B read with 420 IPC and Section 12 of the Prevention of Corruption Act, by virtue of any statutory liability or legal fiction? - Held that:- When there is nothing to show judicial application of mind to the material on record in taking cognizance of the offences under Sections 420 & 120B IPC & Section 12 of the PC Act, so far as the petitioner/A3-Sri N. Srinivasan concerned, the cognizance taken by the special judge for CBI cases requires to be quashed for no basis to sustain the cognizance order from the material on record from what is elaborately discussed supra on facts and law.
Thus, the proceedings so far as petitioner/A3 concerned are liable to be quashed for above material on its face when can be held not sufficient to accuse in the police final report or to take cognizance by the learned Special Judge there from against the petitioner/A3 personally, to say no prima facie material to make him liable to face the ordeal of trial or even to frame charge against him from the prosecution material placed reliance with the police final report that is the criterion for the charge to be framed as per the settled expression of the Apex Court more particularly from the three Judge bench expression in State of Orissa v. Debendranath Padhi, (2005) 1 SCC 568, though so far as the quash petition concerned, the accused is also entitled to bring any additional material in asking the Court to receive to consider and the Court can receive to consider as held by referring to Debendranath Padhi's case (2004 (11) TMI 564 - SUPREME COURT), also in the subsequent expressions and in particular in Rukmini Narvekar v. Vijaya Satardekar [2008 (10) TMI 668 - SUPREME COURT]. Accordingly the points 1-3 are answered.
In the result the petition is allowed and the proceedings from the cognizance of the offences under Sections 420 and 120B IPC and Section 12 of the PC Act, taken by the Principal Special Judge for C.B.I. Cases, Red Hills, Nampally, Hyderabad so far as the petitioner/A3-Sri N. Srinivasan concerned are quashed for no basis to sustain. The bail bonds of the petitioner/A3-Sri N. Srinivasan if any shall stand cancelled. The miscellaneous petitions pending if any stand closed.
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2016 (3) TMI 1288
Whether on the facts and in the circumstances of the case the assessment orders for the years 1998-99 to 2002-03 passed on 29.6.2008 are barred by limitation in view of the provisions of Rule 28A(10)(ii) of the HGST Rules which require the assessments to be completed by 31st December in respect of the assessment year immediately preceding thereto? - Held that: - The issue raised herein involves examination of factual matrix viz-a-viz various amendments incorporated in the HVAT retrospectively w.e.f. 1.4.2003 - A perusal of the order of the Tribunal shows that no cogent reasons have been recorded by it relating to the applicability or otherwise of the various amendments brought in HVAT effective from 1.4.2003 and its effect on the facts of the present case.
The references are remanded to the Tribunal to re-adjudicate the issues afresh by providing opportunity of hearing to the parties
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2016 (3) TMI 1287
Revision u/s 263 - scope of revision orders - rejection of books of accounts - profit estimation by AO - Held that:- Provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by the AO. It is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous.
In the case of Malabar Industial Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME Court] has also made clear that the phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of the Revenue. Stated that when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law.
In the present case, we find that AO offered various opportunities to the assessee the various opportunities listed in the assessment order are dated 6.6.2012, 11.09.2012 and 19.03.2013, however, the assessee did not submit the full details required by AO and further the documents submitted by assessee were unconfirmed copies of accounts of the parties from whom purchase were made, therefore, AO had no option but to reject the books of accounts of assessee and to estimate the income of assessee by applying net profit rate. We do not find the order of Assessing Officer to be erroneous and prejudicial to the interest of Revenue - Decided in favour of assessee.
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