|
Advanced Search Options
Case Laws
Showing 21 to 40 of 1465 Records
-
2016 (4) TMI 1446 - ITAT AMRITSAR
Survey proceedings - Excess stock of Narma was found - method of weighment - survey party drew inventory of the said excess stock, on the basis of weighment of the Narma - grievance of the assessee is that such weighment was not done in accordance with the provisions of the Standards of Weights and Measures Act, 1976, by any standardized scale using standard weights and measures, but by adhoc weighing of the Narma by using cartons - HELD THAT:- The mandate of the section 133A(1) is that it is the surveying Authority who is to 'require' the person attending to or helping in the business carried on at the premises under survey to be afforded the necessary facility to check or verify the stock found during the survey. It is only on such requirement having been expressed by the surveying Authority, that the said authority shall essentially be afforded such facility for checking or verification of the stock found in the survey.
Income-tax Authorities must help the assessees, not otherwise. The Authority cannot withhold such legal requirement from the assessee prejudicially and then, on the contrary, hold the assessee liable for not making good such legal requirement. Even the DBCT, in its Circular no.l4(XI-35) of 1995, dated 11.4.55, has directed that: "Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing relief and in this regard the officers should take the initiative in guiding a tax payer where the proceedings or other particulars before them indicate that some refund or relief is due to them."
CIT(A) has remained oblivious of the above extant provisions of law and has, therefore, erroneously put the shoe on the wrong foot.
CIT(A) has illegally rest the burden on the assessee by observing that it was the assessee who did not provide the requisite facility of weighment under the Standards of Weights and Measures Act, 1976 to the surveying Authority, whereas, as discussed hereinabove, the position is quite diametrically opposite.
So, it was the surveying Authority who arbitrarily never required the assessee to provide him with the weightment facility and it was not the assessee who refused to do so. Per contra, the assessee in fact did not have any occasion whatsoever to make such a refusal.
Remarkably, it was the assessee who objected, at ground zero itself, against the action of the survey Authority, of weighing the Narma not as per the provisions of the Standards of Weights and Measures Act, 1976 , but by using cartons. This objection, however, was overruled. This fact has also not been repudiated by the Department, though it is patent on record. Therefore, the reasoning adopted by the ld. CIT(A) is unsustainable in law, for which, the addition could not have been made and the same cannot be upheld. The same, accordingly, is deleted. Ground Nos. 1 to 3 are, hence, allowed.
Disallowance of various expenses - HELD THAT:- As there has been no dispute on the part of the assessee that as observed by the ld. CIT(A), there was no mechanism for verifying the purported expenses being recorded in the books of the assessee. The only grievance raised is that the relief granted is less. As to how it is so, nothing has been brought on record. Therefore, this action of the ld. CIT(A) is justified and is confirmed. As such, Ground no.4 is rejected.
-
2016 (4) TMI 1445 - DELHI HIGH COURT
Validity of interim award - interim award does not contain reasons - nature of default award for non-compliance with the orders passed on the application under Section 17 - plea of equitable set of raised by Nimbus India not addressed - Nimbus India's application for inspection was still pending - the issue of limitation not adjudicated - Invocation of doctrine of equitable set off.
HELD THAT:- An adjudication has to have three necessary elements, namely: a hearing; recording of conclusion based on material available; and reasons in support of the conclusions - all three elements are satisfied in the instant case. It is not a case where Nimbus India was not given a hearing.
Recording of conclusion based on evidence - HELD THAT:- A definite conclusion recorded by the Arbitral Tribunal in its order dated May 06, 2014, to the effect that the material on record and the letters of Nimbus India and Nimbus Singapore themselves establish the claim of Prasar Bharati that the amount of ₹ 22,77,67,422/- was due to it. Before recording the said conclusion, the Tribunal had set out the respective stands of the parties. The order spanning 6 pages records the respective submissions in the first three pages, a brief capturing the important letters containing the admissions followed by the conclusion.
To invoke the doctrine of equitable set off, the cross demands should arise from the same transaction or should be so connected that they can be looked upon as part of the same transaction.
Admittedly, in this case, there were four different series and it cannot be said that cross demands arise out of the same transaction. The said demands were not so connected that they could be looked upon as part of one transaction. Further, the accounting between Prasar Bharati was independent with Nimbus Singapore and with Nimbus India. The claim of Nimbus India was that Nimbus Singapore had assigned the debts and the claims to it and thus with respect to the transactions between Prasar Bharati and Nimbus Singapore vis-a-vis those between Prasar Bharati and Nimbus India the question of inter-se equitable set off would inherently not arise. Further, Nimbus India could not raise for purposes of its counter claim any issue concerning India-England 2006 Series because the transaction between the said parties was not a subject matter of the arbitration proceedings - Just because Nimbus India in its letter dated May 16, 2009 sought to make adjustments by clubbing together all the series would not make them so inter-connected.
Set off is like a cross suit or cross action. It is well settled that even a counter claim can be ordered to be tried by way of a separate suit. Its hearing can also be deferred. Pendency of a counter claim does not bar the Tribunal from making an interim award to the extent of admissions - It is well settled that in the case of breach of contract, pecuniary liability arises only after adjudication. Prior to that, there is no liability and no obligation to pay.
A decree on admissions is to be passed if it is impossible for the party making the admission to succeed in the face thereof. In this case the admissions made are judicial admissions which cannot even be retracted.
Time limitation - HELD THAT:- The set off was claimed on May 16, 2009. The arbitration agreement between the parties is dated August 31, 2011. There is no scope to argue that the claim was barred by limitation.
We must frown upon the attitude of Nimbus India and Nimbus Singapore who are in utter breach of their respective obligations to secure the amounts by furnishing bank guarantees and to execute formal agreements. The two did not furnish the bank guarantee or deposit the amount directed by the Arbitral Tribunal nor complied with similar directions passed in the appeal. Whereas Nimbus Singapore has no asset in India, the assets of Nimbus India also appear to be nil. That is the reason why order dated October 31, 2014 passed by the learned Single Judge in AA No. 30/2014 requiring Nimbus India to file an affidavit detailing its assets located in India was not complied with.
The appeal is accordingly dismissed imposing cost in sum of ₹ 50,000/- against Nimbus India and in favour of Prasar Bharati.
-
2016 (4) TMI 1444 - ITAT CHANDIGARH
TDS u/s 195 - payment of web hosting charges to US company - addition under section 40(a)(ia) - CIT-A deleted addition - CIT-A deleted addition - As per DR clause (iva) to Explanation-2 to Section 9(1)(vi) the use or right to use any industrial, commercial or scientific instrument would fall within the definition of "royalty", therefore, ld. CIT(Appeals) should not have deleted the addition - HELD THAT:- The word 'use' or 'right to use' in clause (iva) of Explanation-2 below Section 9(1)(iva) of of the Act is regarding use of equipment in actual sense. In the present case, it was found that assessee had nothing to do with the equipments and had only made use of facilities created by the service provider who were the owners of entire infrastructure and related equipments. The assessee company is neither in possession of equipments nor it uses the equipment solely for its own purpose. The equipments are used by the Non Resident Inc to provide service to the assessee and others, therefore, assessee has no control over the equipments as well as operating system.
When the payments are not in the nature of 'Royalty" as per Explanation-II (via) of Section 9(1)(vi) of the Act, then recipient of the said payments, being non resident, having no PE in India, is not liable to tax in India. Therefore, payments in the hands of M/s Pugmarks Inc & Others are not taxable in India and consequently, no tax required to be deducted under section 195 on such payment/remittance by the assessee. Such payments, therefore, cannot be termed as 'royalty' - as found that services are rendered outside India by non-resident and paid outside India, then the provisions of Section 195 do not apply in case of such payments. As the company who had provided web hosting services, was located outside India and the server was also located outside India, income that had arisen is not taxable in India.
We find that the issue is also covered in favour of the assessee by judgements in the case of People Interactive (I) Pvt.Ltd. [2012 (2) TMI 534 - ITAT MUMBAI], Yahoo India Pvt. Ltd. [2011 (6) TMI 162 - ITAT, MUMBAI] and decision in the case of Dell International Services (India) Pvt. Ltd. [2008 (7) TMI 9 - AUTHORITY FOR ADVANCE RULINGS] No infirmity in the order of the ld. CI T(Appeal s) have been pointed out. - Decided agaianst revenue.
-
2016 (4) TMI 1443 - GUJARAT HIGH COURT
Scheme of Amalgamation proposed - prayer for dispensation of the meetings of the Equity Shareholders and Creditors of the Applicant Company - HELD THAT:- It has been submitted that all the Equity Shareholders, Secured Creditors as well as the Unsecured Creditors of the Applicant Company have approved the Scheme in the form of written consent letters. All these consent letters are annexed with the Application respectively as Exhibit‘ D’, ‘E’ and ‘F’. The certificates confirming the status of the Shareholders and Creditors as well as the receipt of consent letters from all of them are collectively annexed as Exhibit‘ G’. In view of the same, dispensation is sought from convening the meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Applicant Company.
Considering the facts and circumstances and the submissions advanced, the same is, hereby, granted - Application disposed off.
-
2016 (4) TMI 1442 - GUJARAT HIGH COURT
Scheme of Amalgamation proposed - prayer for dispensation of the meetings of the Equity Shareholders and Creditors of the Applicant Company - HELD THAT:- The attention of the Court is drawn to paragraph11 of the Affidavit in support of the Judges Summons. It has been contended that the rights and interests of the Creditors of the Transferee Company shall not be prejudicially affected as a result of the Scheme. A certificate of the Chartered Accountant confirms the Net Worth of the Transferee Company to be substantially positive viz. Rs.2.59 Crores in the PreScheme and Rs.13.71 Crores in the PostScheme scenario. The said certificate is also placed on record as Exhibit‘F’. In view of the same, dispensation is sought from convening the meetings of the Creditors of the Applicant Company.
Considering the facts and circumstances and the submissions advanced, the same is, hereby, granted - Application disposed off.
-
2016 (4) TMI 1441 - PUNJAB AND HARYANA HIGH COURT
Seeking permission for withdrawal of petition - it was submitted that liberty be granted to the petitioners to file an appeal along with the application for waiver of pre-deposit before the Appellate Authority - HELD THAT:- Dismissed as withdrawn. It shall, however, be open to the petitioners to take recourse to the remedies as may be available to them, in accordance with law.
-
2016 (4) TMI 1440 - ITAT JAIPUR
Addition u/s 40A(3) - return of income was filed by the assessee on presumptive basis u/s 44AF - HELD THAT:- Respectfully following the decision in the case of Gopalsingh R Rajpurohit vs. ACIT, [2004 (7) TMI 271 - ITAT AHMEDABAD] hold that once the assessee has filed his return u/s 44AF, no further disallowance can be made u/s 40A(3) of the Act. It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of Section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with non-obstante clause and overrides other provisions. In view thereof, there is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed.
-
2016 (4) TMI 1439 - CALCUTTA HIGH COURT
Challenge to certificates of demand of tax, interest, penalty, the consequent steps taken by the Revenue in treating him as an assessee in default to auction his property, the sale proclamation and the auction sale notice - Tax Recovery Officer had made a statement giving particulars of reserve prices against individual plots - HELD THAT:- The omission has caused accrual of a right in favour of the assessee inasmuch as such rectification proceeding cannot be initiated today. Hence, the actual aggregate demand for the said assessment year is also wrong. All this has been taken into account for the purpose of declaring his client as an assessee in default to proceed to sell his properties. There is no indication as to how such separation of valuations attributed to individual plots was made by the Recovery Officer, either from the documents of valuation on record or from the statement itself.
Petitioner submits that there should be interference by reason of both counts of challenge being upheld. The appropriate reliefs should be granted to the petitioner.
Mr. Bhattacharyya, learned advocate appearing on behalf of the auction purchaser who is the petitioner wants to make his submissions. His submissions will be heard after submissions made on behalf of the Revenue are heard and in the event this Court forms the opinion that the challenge cannot be upheld. Mr. Bhattacharyya informs this Court that in the event the assessee is successful, his client would want an adjudication regarding interest to be paid on the refund thereby becoming due to them.
List these writ petitions on 18th April, 2016.
-
2016 (4) TMI 1438 - ITAT DELHI
Reopening of assessment u/s 147 - information received from the Investigation Wing of the Department that there was credit shown in the bank account of the assessee coming from the account of Rubik Exports Ltd. - HELD THAT:- Admittedly, the material and statements of some persons on the basis of which the Investigation Wing of the Department claimed to have arrived at a conclusion that the assessee had taken accommodation entry, despite request of the assessee made to the AO, were not supplied to the assessee nor any opportunity to cross examine those persons whose statements were used against the assessee was afforded to the assessee. Even approval of the competent officer has not been obtained as a token of his satisfaction on the reasons recorded by the AO for initiation of reopening proceedings in the manner prescribed under sec. 151 - We thus respectfully following the ratios laid down in the above cited recent decisions in the cases of G & G Pharma India Ltd. [2015 (10) TMI 754 - DELHI HIGH COURT] and Signatures Hotel P. Ltd. [2011 (7) TMI 361 - DELHI HIGH COURT] hold that initiation of reopening proceedings in the present case, merely based on the vague information received from the Investigation Wing of the Department, without application of mind by the Assessing Officer thereupon and in absence of obtaining of approval in the manner provided u/s 151 of the Act, was not valid and the assessment in question framed in furtherance thereto is held void-ab-initio and is accordingly quashed. The ground Nos. 1.1 and 2 are thus allowed.
Addition u/s 68 - We find substance in the above submission of the learned senior counsel that by furnishing all the primary evidences like confirmation of share applicant, a public limited company containing their address and PAN, their balance sheet and profit and loss account for the assessment year under consideration, their income-tax return acknowledgement and with this admitted position that the share application money of Rs. 5 lacs has been paid by the share applicant to the assessee through account payee cheque, the assessee had discharged its primary onus to establish the genuineness of the claimed receipt of share application money and the onus was thereafter shifted upon the AO to rebut the same. AO instead has made the addition merely on the basis of information received from the Investigation Wing of the Department alleging that the share applicant is entry provider, summons issued to the share applicant returned unserved and an amount was deposited in the account of the share applicant immediately before issuing cheque for the amount to the assessee. In absence of such discharging of onus shifted upon the AO, AO was not justified in making the addition in question and the Learned CIT(A) without appreciating the above material facts has also erred in sustaining the said addition. We thus while setting aside orders of the authorities below in this regard direct the AO to delete the addition questioned in ground No.1.
-
2016 (4) TMI 1437 - GUJARAT HIGH COURT
Admissibility of appeal - Utilization of Cenvat credit for payment of education cess and secondary and higher secondary education cess - HELD THAT:- Tax appeal is, admitted for consideration of following substantial question of law:
Whether in the facts and circumstances of the case, the Tribunal was right in allowing the appeal of the assessee when the demand of Central Excise Duty was in respect of utilization of Cenvat credit of Basic Excise Duty for discharge of Education Cess payable on finished goods for the period July, 2009 to August, 2009 during which the assessee was availing the benefits of area based exemption under Notification No. 39/2001-C.E., dated 31-7-2001?
-
2016 (4) TMI 1436 - JHARKHAND HIGH COURT
Certificate of tax recovery at source in FormJVAT 400 in favour of the petitioner-firm, not issued - grievance of the petitioner is that M/s Hindustan Steel Works Construction Limited made payment to the petitioner after deducting VAT at source - HELD THAT:- The writ petition is bereft of foundational facts for seeking Mandamus to the respondentM/s Hindustan Steel Works Construction Limited to issue FormJVAT 400 to the petitionerfirm. The petitioner has failed to produce a document which would disclose deduction on account of VAT for the works contract by M/s Hindustan Steel Works Construction Limited, for which the respondentM/s Hindustan Steel Works Construction Limited is under a duty to issue certificate in FormJVAT 400. Reliance placed by the petitioner on a clause in the Letter of Intent which provides that the rates are inclusive of sales tax and tax on works contract and if applicable, sales tax/tax at works contract @ 2% would be deducted and TDS for the same would be issued in due course, is also misconceived.
Whether any amount has been deducted by M/s Hindustan Steel Works Construction Limited from the payments made to the petitioner for which it is under a statutory duty to issue FormJVAT 400 or not is a question of fact which cannot be ascertained in the present proceeding. The petitioner kept quiet for long 7 years and did not raise a grievance for nonissuance of FormJVAT 400. If at all, it is found that tax deduction at source has been done from the running bills of the petitioner still, the petitioner has failed to establish that the respondent M/s Hindustan Steel Works Construction Limited is under a legal duty to issue the said certificate. In fact, pursuant to order of the Commissioner of Commercial Taxes Department, pending assessment of the petitionerfirm by the Assessing Authority, the present writ petition appears to be premature also.
The writ petition stands disposed of with liberty to the petitioner to avail remedy under the Jharkhand Value Added Tax Act, 2005 - Application dismissed.
-
2016 (4) TMI 1435 - ITAT MUMBAI
Allowable business expenses u/s 37(1) - expenses incurred for the running of the business of the assessee OR Income from house property - nature of advertisement expenses and business promotion expenses debited under the head “Administrative and Selling Expenses” - possibility of common expenditure - Revenue’s case is that, for earning of rental income, amount should be disallowed on the ground that, this much amount should be allocated for the earning of the rental income from the amount of expenses debited under the head “Administration & Selling Expenses” as appearing in Schedule “E” above - HELD THAT:- From the clear cut covenants and terms of the agreement, it is abundantly clear that the assessee does not have to incur any administrative expenditure for running and maintenance of the Mall and, therefore, in the light of these facts and background, it cannot be held that any administrative expenditure should be allocated for running of the Mall.
On a perusal of expenditure debited under Schedule E, as incorporated above, it is seen that the assessee has debited sum under the head “Advertisement” and under the head “Business Promotion Expenses”. Further, from a perusal of break-up of these expenses which was filed before the CIT(A), we find that certain amounts have been debited for “Mall Upkeep & Promotional receipt”.
If these expenditures are related for earning of income from Mall then, definitely it cannot be allowed as an expenditure under section 37(1) i.e. while computing the business income of the assessee, because admittedly, receipts from the Mall is in the form of lease rental which has been assessed under the head “Income from House Property” like in the earlier and subsequent years. This fact needs proper verification and examination by the AO which has not been done in the proper prospective.
This matter should be restored back only for the limited purpose of examining the nature of advertisement expenses and business promotion expenses debited under the head “Administrative and Selling Expenses” as enumerated in Schedule E of the Profit & Loss Account. If these expenditures directly attributable to earning of lease rental income then, appropriate disallowance can be made, if at all required. With this direction this issue is treated as partly allowed for statistical purposes.
Disallowance made u/s 14A - incurring of any expenditure in respect of earning of the exempt income - HELD THAT:- CIT(A) has referred to the earlier order of the CIT(A) and Tribunal for the assessment year 2008-09, however before us, nothing relating to A.Y. 2008-09 has been filed before us. In any case, we find that, assessee’s claim with regard to non-incurring of any expenditure for earning of exempt income has not been examined by the AO, as per the requirement of section 14A(2) and (3). The AO has blindly followed Rule 8D without complying with the mandatory requirement of section 14A(2) and (3). Therefore, in the interest of justice, we are restoring this issue to the file of the AO to examine the nature of accounts of the assessee and also the contentions raised before us that all these investments are strategic investment made in the subsidiary company and decide the issue afresh and in accordance with the law. Accordingly, ground as raised by the assessee is treated as allowed for statistical purposes.
-
2016 (4) TMI 1434 - SUPREME COURT
Prosecution or other legal proceedings relating to Police officers - Institution of proceedings without prior sanction of the Central Government, is allowed or not - Section 6 of Punjab Disturbed Areas Act, 1983 - HELD THAT:- It has been laid down in Gauri Shankar Prasad [2000 (4) TMI 848 - SUPREME COURT] that in case offence has been committed while discharging his duties by an accused and there is a reasonable nexus with official duties, if answer is in the affirmative then sanction is required. However it would depend upon the facts and circumstances of each case whether there is a reasonable nexus with official duties to be discharged.
In PK PRADHAN VERSUS THE STATE OF SIKKIM REPRESENTED BY C.B.I. [2001 (7) TMI 1298 - SUPREME COURT] this Court considered the provisions contained in Section 197(1) of the Code of Criminal Procedure whether an offence committed "while acting or purporting to act in the discharge of his official duty" and laid down that the test to determine the aforesaid is that the act complained of must be an offence and must be done in discharge of official duty. In any view of the matter there must be a reasonable connection between the act and the official duty. It does not matter that the act exceeds what is strictly necessary for the discharge of the official duty, since that question would arise only later when the trial proceeds. However no sanction is required where there is no such connection and the official status furnishes only the occasion or opportunity for the acts.
In STATE OF ORISSA THROUGH KUMAR RAGHVENDRA SINGH AND ORS. VERSUS GANESH CHANDRA JEW [2004 (3) TMI 824 - SUPREME COURT] this Court has held that protection Under Section 197 is available only when the act done by the public servant is reasonably connected with the discharge of his official duty and is not merely a cloak for doing the objectionable act. The test to determine a reasonable connection between the act complained of and the official duty is that even in case the public servant has exceeded in his duty, if there exists a reasonable connection it will not deprive him of the protection. This Court has also observed that there cannot be a universal Rule to determine whether there is a reasonable connection between the act done and the official duty nor is it possible to lay down any such rule.
In the instant cases, the allegation as per the prosecution case it was a case of fake encounter or death caused by torture whereas the defence of the accused person is that it was a case in discharge of official duty and as the deceased was involved in the terrorist activities and while maintaining law and order the incident has taken place. The incident was in the course of discharge of official duty. Considering the aforesaid principles in case the version of the prosecution is found to be correct there is no requirement of any sanction. However it would be open to the accused persons to adduce the evidence in defence and to submit such other materials on record indicating that the incident has taken place in discharge of their official duties and the orders passed earlier would not come in the way of the trial court to decide the question afresh in the light of the aforesaid principles from stage to stage or even at the time of conclusion of the trial at the time of judgment.
Appeal disposed off.
-
2016 (4) TMI 1433 - ITAT JABALPUR
Undisclosed investment in stock - excess stock found during the course of survey - HELD THAT:- As observed from the assessment order that on 07/01/2004, the assessee surrendered Rs. 3 Lac as income from undisclosed source as the assessee could not reconcile the difference in stock - AO has simply made the addition of the balance amount being excess stock found during the course of survey without considering the reconciliation submitted by the assessee before him. The addition was made merely on the basis of difference in stock found between the books of accounts and the physical tally of the stock.
AO was not justified in rejecting the explanation of the assessee submitted before him together with the reconciliation of the stock without verification and pointing out error therein. No material was brought on record by the Revenue to show that there was in fact any amount of undisclosed income in the form of excess stock more than Rs. 3 Lac disclosed by the assessee. In absence of the same, we find that the addition made by the Assessing Officer and sustained by CIT (Appeals) cannot be upheld. We, therefore, set aside the orders of the lower authorities and delete the addition and allow the ground of appeal of the assessee.
Disallowance under the head interest expenditure - AO found that the assessee had paid interest to three persons @ 18%, 20.52% and 19% which was excessive and according to him, the prevailing market rate of interest was 12% - HELD THAT:- We find that the disallowance has been made by AO on account of interest paid to relatives under sec. 40A(2) of the Act. We find that the Assessing Officer has brought no material on record to show that how the interest paid by the assessee was excessive by comparing it with the market rate of interest on loan on the date of taking of the loan by the assessee. In absence of the same, in our considered view, the disallowance made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) cannot be sustained in law, hence, delete the disallowance of interest expenditure and allow the ground of appeal of the assessee.
-
2016 (4) TMI 1432 - ITAT HYDERABAD
Exemption u/s 11 - grants/contribution received by the assessee from different organisations, are in the nature of tied-up grants and thus cannot be taken into consideration for the purpose of computing total income of the assesses u/s 11 - HELD THAT:- As tri - partied agreements clearly states the budgets sanctioned, the responsibilities of Resource, implementing and Facilitating Agencies in the case of projects which are meant to be implemented thru partner NGOs. Whereas the projects which are implemented through the Assessee, the agreements are entered into with Assessee as implementing Agency along with the budget proposals sanctioned. These co-operative documents are clearly demonstrate that these grants are sanctioned for the specific purpose and the Assessee and NGOs are required to submit the audit financials and progress reports to the Resource agency. These transactions are subject to ethical audits. Since these projects are driven in the direction of the resource agency and accordingly the grants are sanctioned, are clearly demonstrate that these are tied up grants. Since the tied up grants cannot be treated as the income of the society as per the ratio laid down in the case of Nirmal Agricultural Society [1998 (12) TMI 106 - ITAT HYDERABAD-B]
We are inclined to hold that the above grants are in the nature of tied up and Assessee has no control over the funds except facilitating to implement the projects. Hence Ground raised by the revenue are dismissed.
-
2016 (4) TMI 1431 - ITAT CHENNAI
Ex-parte orders of the CIT(A) - denial of justice - whether CIT(A) has not given proper opportunity to the assessee and dismissed the appeals of the assessee ex-parte? - HELD THAT:- As all these appeals were dismissed by ex-parte orders of the CIT(A) observing that none appeared before him nor adjournment petition was filed - we restore all these appeals back to the file of the CIT(A). The CIT(A) shall decide the appeals after providing adequate opportunity to the assessee. The assessee shall co-operate with the appeal proceedings. With the above observation, the appeals are allowed for statistical purposes.
-
2016 (4) TMI 1430 - SC ORDER
Reopening of assessment u/s 147 - Reasons to believe - ATM is a computer or ought to be treated as normal plant and machinery, attracting different rates of depreciation - reason for reopening being merely a change of opinion on account of the assessment being made for the subsequent years would not give the AO the jurisdiction to reopen - HELD THAT:- There is a delay of 234 days in filing this Special Leave Petition and we do not find any justifiable reason to condone this huge delay.
Special Leave Petition is, accordingly, dismissed on the ground of delay. However, the question of law is kept open.
-
2016 (4) TMI 1429 - ITAT PUNE
Revision u/s 263 - Reopening of assessment u/s 147 order set aside by CIT - Disallowance u/s 40(a)(ia) towards payment made by assessee to one JD Fabricators and verify the claim of the assessee with regard to the payment made as claimed as purchase instead of professional charge - HELD THAT:- We are totally at loss to perceive such action of the CIT. AO in exercise of quasi judicial powers and on consideration of reply of the assessee on the issue which is subject matter of agitation, has categorically recorded that the disallowances have been correctly made and no discrepancy subsists. Thus, the very issue for which S. 147 was invoked was addressed to the satisfaction of the Assessing Officer on facts.
A communication by the Assessing Officer to the CIT captioned ‘final reply in respect of internal audit objection in the case of M/s Laxminarayan Associates A.Y 2005-06’ wherein it was explained to the CIT that the disallowance under S. 40(a)(ia) could not be invoked owing to its inapplicability citing objective facts
CIT has not demonstrated any perversity in such conclusion on facts while invoking powers under S. 263 of the Act. Needless to say, once an enquiry on the issue has been carried out and a conclusion thereon has been arrived at by the Assessing Officer, the same cannot be interfered with under S. 263 merely because the Commissioner wants it to be carried out in particular way.
Mere disagreement of the CIT with the order of the Assessing Officer would not in our view render such order erroneous. We find that it cannot be said that the Assessing Officer has acted perfunctorily while dropping the proceedings. Mere ipse dixit of the CIT is not the best foundation for invoking powers under S. 263 of the Act.
We find considerable merit in the arguments canvassed on behalf of the Assessee for cancellation of the order of CIT. - Decided in favour of assessee.
-
2016 (4) TMI 1428 - ITAT JAIPUR
Disallowance on account of interest on unsecured loans paid in excess of 18% to the persons specified u/s 40A(2)(b) - assessee company has paid interest at the rate of 21% on unsecured loans to the persons specified u/s 40A(2)(b) - AO has found the same to be excessive and has disallowed interest paid in excess of 18% and made an addition HELD THAT:- What needs to be appreciated is that the AO and LD CIT(A) have failed to appreciate the distinction between a secured loan and an unsecured loan. The secured loan comparatively carried a lower risk element as compared to an unsecured loan and basis the risk assessment and other considerations, it typically carried a lower rate of interest.
In the instant case, the appellant has taken unsecured loan and an appropriate comparison would have been the rate prevalent in the market vis-a-vis unsecured loan. Apparently, the appellant has stated that the prevailing market rate of interest on unsecured loans was 24%. However, nothing has been brought on record by the AO to suggest what the appellant has stated to be incorrect or there is a better comparison which is available.
We have gone through the judgement of Ramesh Chand (HUF) [2013 (2) TMI 151 - PUNJAB & HARYANA HIGH COURT] wherein addition was made in appellant's case because of higher rate of interest paid by appellant to his mother as against market rate. The High Court confirmed the addition on the ground that since transaction in question was not a genuine and bona fide transaction, Tribunal was justified in confirming addition of interest paid on old loan at higher rate of interest by applying provisions of section 40A(2)(b) and no question of law arises. In the instant case, there is no such allegation or finding of the lower authorities that the subject loan transaction was not a genuine transaction. Hence, this decision is no help to the Revenue.
We have also gone through the decision of Aditya Medisales Ltd [2010 (5) TMI 823 - GUJARAT HIGH COURT] and finds that the same support the case of the appellant. In that case, the Court has noted that the interest on unsecured borrowings is always higher than the rate of interest paid to the banks or financial institution from where the loans raised are secured loan, and have accordingly accepted interest paid to Sun Pharmaceuticals at the rate of 24% to be reasonable.
We are of the view that CIT(A) was not justified in confirming the disallowance on account of interest paid by the appellant to specified persons u/s 40A(2)(b) of the IT Act. Hence, ground of the appellant is allowed.
-
2016 (4) TMI 1427 - ITAT MUMBAI
Disallowing the provisions made in DMT division - assessee has not given details and these expenses pertains to earlier years or subsequent years - HELD THAT:- Assessee stated that this issue is covered against the assessee by the tribunal’s order in assessee’s own case for A.Y. 2003-04 [2015 (7) TMI 910 - ITAT MUMBAI] burden to prove its return, as well as claims preferred thereby, is only on the assessee, and which we find as not discharged to that extent. It may also be clarified here that the assessee had been extended sufficient opportunity to present its case. Needless to add, the assessee is a liberty to make a fresh claim for the subsequent year/s, even as it shall have to be shown by it that expenditure as claimed had arisen for those years, i.e., of payment, each year being independent. We may though clarify that we are not making any observation with regard to the deduction of the said expenditure for those years/s. We decide accordingly, dismissing the assessee’s ground.
Disallowance u/s. 14A r.w.r. 8D - assessee stated that these two assessment year are A.Ys. 2004-05 and 2005-06 and Rule 8D is not applicable in these two assessment years - HELD THAT:- As assessee stated that prior to the applicability of Rule 8D of the Rules, the disallowance should be restricted to a reasonable extent, i.e., 1% to 2% in view of the decision of M/s. Godrej Agrovet Ltd [2014 (8) TMI 457 - BOMBAY HIGH COURT] On query form the Bench, the ld. Sr. (DR) also conceded that of reasonable disallowance on this issue can be made and requested for estimation of disallowance of 2%. On this, the ld. Counsel for the assessee very fairly agreed for the same. In view of the above concession given by both the parties, we direct the A.O. to recompute the disallowance by estimating at 2% of the exempt income. The A.O. is directed accordingly.
Disallowance of deduction u/s. 80-HHC - Whether CIT(A) erred in holding that in case there is negative profit as per computation under clause (a), (b) and (c) of sub section (3) of section 80HHC, the appellant would not be entitled to deduction as per proviso of the section - HELD THAT:- As computation of the deduction u/s. 80HHC, and which was, at the very outset, again, admitted by the ld. AR to be squarely covered against the assessee by the decision of the Apex Court in the case of Ipca Laboratories Ltd. [2004 (3) TMI 9 - SUPREME COURT] We, accordingly, direct for computation of deduction u/s. 80HHC in terms of the said decision by the said hon’ble apex court.
Disallowance of expenses for earning exempt income u/s. 14A while computing income u/s. 115JB - HELD THAT:- As assessee stated that the additions to be restricted to the amount disallowed u/s. 14A of the Act by CIT(A) in the normal provisions because the Rule 8D of the Income Tax Rules will not apply in these two assessment years. In view of the above, we are of the view that the disallowance should be restricted to the extent amount already disallowed u/s. 14A of the Act and not exceeding the same. We order accordingly.
Disallowance of provision of expenses - HELD THAT:- We direct the A.O. to verify the fact of taxation of this provision of expenses in earlier year. In case these provisions in expenses have taxed in earlier years, the same when reversed should not be taxed. We direct the A.O. accordingly assessee’s appeals are partly allowed for statistical purposes.
........
|
