|
Advanced Search Options
Case Laws
Showing 201 to 220 of 1081 Records
-
2021 (5) TMI 881 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - Income deemed to accrue or arise in India - writ against the show cause notice - as contended that absolutely there is no business activity in India, there is no manufacturing unit, not even a single product is sold within the territory of India by the petitioner-company - the company is only providing logistic support to the company at Hong Kong and goods are supplied in African Countries and South America and in other countries - HELD THAT:- As show cause notice cannot be assailed in view of the fact that many informations and evidences as well as the modus operandi of the petitioner-company are elaborated with reference to certain informations, statements and evidences collected by the respondents. All such details, informations and evidences are to be answered by the petitioner-company in order to cull out the truth and to form an opinion with reference to the grounds raised by the petitioner.
A writ against the show cause notice may be entertained, however on certain limited grounds. A writ against the show cause notice is entertained only to ascertain whether the show cause notice has been issued by the competent authority or if there is any lack of jurisdiction. Even in other cases, where a mala fide intention is raised, then also a writ against the show cause notice may be entertained.
Regarding the disputed facts, circumstances and evidences, no writ can be entertained against a show cause notice. The petitioner cannot be permitted to adjudicate the disputed facts and circumstances in a writ proceedings with reference to the documents and evidences. Such an exercise is to be done by the authorities competent by examining the evidences and the documents and by affording opportunity to the persons concerned.
The law is settled regarding the entertainability of the writ petition against a show cause notice, so also the notice issued under Section 148 of the Act. In both the cases, it is to be construed that the facts are to be adjudicated. However, if the petitioner is able to establish that the proceedings are initiated without jurisdiction or authority, then alone a writ can be entertained and even in such circumstances, the order passed without jurisdiction is to be quashed and the matter is to be remanded back for reconsideration by the competent authority.
Looking into the spirit of Section 9(1)(i) of the Act, in the context of the contents made in the show cause notice dated 05.03.2015, it is sufficient to form an opinion that the matter requires effective and elaborate adjudication in order to cull out the truth with reference to the pleadings and grounds raised by the petitioner.
Petitioner has approached this Court at initial stage only on the ground that the respondents have no authority to invoke Section 147 of the Act. However, perusal of the reasoning given in the show cause notice, it is suffice to arrive a conclusion that there are materials and evidences enough to allow the Department to proceed with the issues and adjudicate the same based on the materials and evidences available and by affording opportunity to the petitioner.
As far as the contentions of the petitioner are concerned, this Court is of the considered opinion that the case of the petitioner squarely falls under Section 9(1)(i) of the IT Act, which contemplates income deemed to accrue or arise in India and to satisfy the provisions of Section 9(1), the respondent-Department elaborated the details and made an analysis on the modus operandi of the petitioner and thus, the details are unambiguously recorded in the impugned show cause notice issued in proceedings dated 05.03.2015. Thus, all such analysis as well as evidences collected are to be answered and to be adjudicated and a final decision is to be taken by the authority. In view of the fact that the requirements of Section 9(1) of the Income Tax Act are satisfied with reference to the reasons furnished in the show cause notice, and further, this Court considered the implications of Section 5(2)(a) and 5(2)(b) of the Income Tax Act and Section 6(3)(ii) of the Income Tax Act in earlier paragraphs of this order. Once the income deemed to accrue or availed in India is prima facie established by the respondents, then all further adjudications are to be done by following the procedures contemplated under the Statutes and with reference to the grounds raised by the petitioner. Thus, this Court cannot entertain such disputed facts in the present writ proceedings.
Entire reading of the impugned show cause notice throws light on the issue and therefore, this Court has no hesitation in forming an opinion that there are prima facie materials and evidences enough to proceed against the petitioner under the provisions of the IT Act.
The contentions in the impugned show cause notice alone cannot be a conclusive factor and all such facts, circumstances as well as the documents and evidences collected and recorded in the impugned show cause notice are to be adjudicated elaborately by the authorities competent by affording opportunity to the petitioner, Thus, the petitioner is bound to avail the opportunity in order to defend their case. The petitioner may not make an attempt to escape from the clutches of law based on unsustainable grounds, which all are not substantiated.
Sanction under Section 151 - Department able to establish that the sanction as contemplated under Section 151 has been granted by the competent authority and further regarding the plea that the petitioner has not been assessed in India, the said facts are controverted by the Department by placing evidences and materials and the details. All those materials and evidences were analysed by the competent authority and the findings made during the analysis were also made available in the impugned show cause notice dated 05.03.2015. The show cause notice dated 05.03.2015 is selfsufficient to form an opinion that the matter requires an elaborate adjudication in depth in order to cull out the truth behind the pleadings made by the petitioner.
The business transactions, which all are complex in nature and made by the traders, many times in a calculated manner are to be adjudicated with expertise in the field and such an exercise must be allowed to be done by the competent authorities of the Income Tax Department and in the event of interference at the earliest stage and in the absence of any ground regarding the jurisdiction, the Court must in all fairness allow the authorities to proceed with the adjudication and pass an order of assessment enabling the petitioner to prefer an appeal even thereafter if any grievance exists.
Order - Petitioner could not able to establish any acceptable ground for the purpose of interference at the stage of issuance of a notice under Section 148 and the issuance of show cause notice and contrarily the respondents could able to establish that sufficient materials are available on record, which were considered and scrutinised and a finding on such analysis is also recorded in the impugned show cause notice, there is no reason whatsoever to interfere with the actions of the respondent and thus, all the writ petitions fail and stand dismissed. In view of the fact that the respondents had already completed the assessment process and passed an assessment order and kept the same in a sealed cover, the respondents are permitted to open the sealed cover and communicate the assessment orders to the petitioner without any further delay enabling the petitioner to proceed further, if any grievance exist
-
2021 (5) TMI 880 - KARNATAKA HIGH COURT
CENVAT Credit - input services - services received by the appellant in the capacity of employer for providing food and beverages in the canteen maintained and run in the factory as per the mandate of Section 46 of the Factories Act, 1948 - HELD THAT:- In the present case the undisputed facts reveal that the orders passed by the authorities, appellate authority and the Tribunal are based upon the amendment which came into force from 1.4.2011 - The undisputed facts make it very clear that the period involved in the present appeal is admittedly of post 2011 period and after the amendment to the provisions of Rule 2(l) defining the ‘input service’ and the amendment to the provision of Rule 2(l) defining the ‘input service’ came into effect w.e.f., 1.4.2011. The definition of ‘input service’ post amendment contains exclusion clause and exclusion clause was effected w.e.f., 1.4.2011. Clause (c) of the said exclusion clause specifically excludes the services provided in relation to ‘outdoor catering’ services. It is certainly not in dispute that said services prior to 1.4.2011 have been held to be covered by the definition of ‘input service’, however, after the amendment came into force in the light of specific exclusion clause, ‘outdoor catering’ service is not at all covered under the definition of ‘input service’.
A Taxing Statute has to be interpreted in the light of what is clearly expressed, it cannot imply anything which is not expressed, it cannot merge provisions in the statute so as to supply any assumed deficiencies - Appeal dismissed.
-
2021 (5) TMI 879 - KARNATAKA HIGH COURT
TDS u/s 195 - payments made by the appellant for purchase of computer software by holding that the said payments are in the nature of ‘royalty’ - disallowance made under Section 40(a)(i) - HELD THAT:- As decided in the case of ENGINEERING ANALYSIS CENTRE FOR EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] amounts paid by resident Indian end-users/distributors to non-resident computer software manufacture/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 - Decided in favour of assessee.
-
2021 (5) TMI 878 - DELHI HIGH COURT
Remission of balance due alongwith interest - HELD THAT:- Petition to be admitted subject to payment of amount in two installments.
Since the remittance involves an interest component, Mr. Aggarwala says that he would be able to inform us as to what would be the balance amount payable only after the instalment payable by the petitioner on or before 20.05.2021 is remitted.
Mr. Aggarwala is directed to indicate, on the next date of hearing, as to what would be the balance amount payable towards tax, after the instalment payable on or before 20.05.2021, is remitted by the petitioner - List the matter on 24.05.2021.
-
2021 (5) TMI 877 - KARNATAKA HIGH COURT
Income chargeable to tax in India - Amount received by the Assessee for sale of software amounted to royalty as defined under Explanation 2 to Section 9(1)(vi) of the Income-tax Act, 1961 and under Section 12 of the India-Israel (DTAA) - HELD THAT:- As decided in the case of ENGINEERING ANALYSIS CENTRE FOR EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] amounts paid by resident Indian end-users/distributors to non-resident computer software manufacture/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 - Decided in favour of assessee.
-
2021 (5) TMI 876 - MADRAS HIGH COURT
Maintainability of petition - association can file appeal or not - Levy of interest for delayed payment under the DEPB Scheme - difference between the DEEC and DEPB schemes - HELD THAT:- In view of the dictum laid down by the Hon’ble Supreme Court of India in MAHINDER KUMAR GUPTA AND ORS. VERSUS UNION OF INDIA (UOI) AND ORS. [1994 (9) TMI 369 - SUPREME COURT] holding the an Association cannot file writ petition seeking relief espousing the cause of its individual members and does not affect any legal right of that Association, it is also not possible to entertain these writ petitions for that reason.
Petition dismissed.
-
2021 (5) TMI 875 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Validity of application admitted for initiation of CIRP - pre-existing dispute or not - contravention of Rule 152, Rule 150 and Rule 89 of the NCLT Rules 2016.
Whether there is any pre-existing dispute? - HELD THAT:- Upon a bare reading of e-mail dated 03.11.2016, it is clear that the Corporate Debtor stated that the supplied coal is not as per specification and due to that nozzle bent and boiler has become damaged which would lead to heavy production losses. Hence, it was requested that delivery of the coal be stopped. It is also mentioned that if more losses occurred due to poor/inferior quality of coal they may debit the same amount in the account of Operational Creditor - Corporate Debtor has neither issued any debit note nor has returned the supplied coal but consumed the same. It means that after receiving the e-mail dated 04.11.2016 the Corporate Debtor was satisfied and kept quiet for about 15 months. It is only when they received a statutory notice that they filed a Civil Suit against the Operational Creditor.
It cannot be held that there was any dispute in regard to the transaction in question. It seems that in order to avoid the liability, the Corporate Debtor through its reply to notice, tried to impress that there was a pre-existing dispute.
The Civil Suit has been filed after receipt of statutory notice, therefore, such Civil Suit cannot be treated as existence of dispute - the Corporate Debtor has failed to prove any pre-existing dispute in regard to transaction in question.
Whether the impugned order is passed in contravention of Rule 152, Rule 150 and Rule 89 of the NCLT Rules 2016? - HELD THAT:- It is an admitted fact that the NCLT Bench, Ahmedabad consisted of Shri H. P. Chaturvedi Member (Judicial) and Shri Prashanta Kr. Mohanty Member (Technical) who heard the application and reserved for orders on 20.11.2019. Thereafter, the parties have filed their written submission on 06.01.2020 and the impugned order was pronounced by the same Bench on 28.05.2020. Meanwhile, vide order dated 12.05.2020 and 30.04.2020 these members have been transferred. However, due to lockdown they were unable to join their new place of posting. Since the members were physically present at Ahmedabad. Therefore, in public interest vide order dated 21.05.2020, a special Bench was constituted to pronounce the orders reserved by the erstwhile Bench as per Section 419 (3) of the Companies Act, 2013 for the period of 22.05.2020 to 29.05.2020. Thus, it cannot be said that the members have pronounced the impugned order in contravention of Rule 152 of the NCLT Rules, 2016.
The Appellant has failed to establish that there was a pre-existing dispute and in pronouncing the impugned order, the Adjudicating Authority committed any illegality - there are no merits in the appeal - appeal dismissed.
-
2021 (5) TMI 874 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Illegal transfer of shares without any consideration - forged signatures - siphoning of funds - HELD THAT:- In the application, there is a vague allegation of fabricating, share transfer deeds and the resignation letter. In the application, it is not mentioned that in what manner Mr. Naveen Kishore siphoned off the money from the Appellant Company and when has he purchased 50 properties in the name of his family members out of the funds of the Company. Even in the application it is not mentioned as to how and when the Respondents got the knowledge that Mr. Naveen Kishore has indulged in fraudulent sale transactions. Further, in support of said allegations the Respondents have not place any document on record.
There is nothing in the order to justify the directions for conducting forensic audit of accounts of the Company that too for more than 15 years. The Adjudicating Authority must record reasons in support of conclusions. However, in the Impugned Order no reasons are mentioned for the said directions. The order is cryptic and non-speaking; therefore, it cannot be sustained.
Appeal allowed.
-
2021 (5) TMI 873 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditor - time limitation - existence of debt and dispute or not - HELD THAT:- The Application under Section 7 (Annexure A-2 Page 77) is stated to have been filed before the Adjudicating Authority on 21st May, 2018. It appears that effort at restructuring did not give desired result and the NPA was declared with back date of 29th June, 2012. Thus there are documents on record even subsequent to 29th June, 2012 like Second Amendatory Agreement dated 13th March, 2014. The Application under Section 7 shows Demand Notices being issued under SARFAESI Act on 31st January, 2015 and 19th June, 2016. It appears that O.A. 150/2016 was also filed before the DRT - The reply which was sent in response to the SARFAESI Notice is within three years of date of NPA dated 29th June, 2012. Then there is document filed with the Reply at Page 177 which is letter from Corporate Debtor to the Andhra Bank dated 05th April, 2016 where there is reference to the OTS Proposal and that the Corporate Debtor proposed to pay the outstanding and due balances as on date of NPA, excluding reversal of interest, penal interest, other charges etc., if any.
The Learned Counsel for the Appellant has argued that before the Adjudicating Authority there was only balance sheet of 2016-17 and not the balance sheet of 2017-18 or the balance sheet of 2015-16. These are technical grounds raised. The authenticity of such balance sheets has not been questioned and for technical reasons, we do not think it to be in the interest of justice to ignore such documents.
There are no financial debt due and in default was time barred or that Adjudicating Authority committed any error when the Application under Section 7 was admitted - appeal dismissed.
-
2021 (5) TMI 872 - ITAT DELHI
Penalty u/s 271(1)(c) - assessee has not responded to the notices - HELD THAT:- Since the additions on which penalty was imposed by the Assessing Officer and sustained by the CIT(A) has been remanded back to the file of the Assessing Officer for thorough investigation/examination to decide the same afresh, therefore, the penalty does not survive at this juncture. Hence, we direct the Assessing Officer to initiate fresh penalty proceedings after completion of fresh Assessment proceedings according to the law and provisions of penalty. Hence, the appeal of the assessee is allowed.
-
2021 (5) TMI 871 - ITAT HYDERABAD
LTCG - Deduction u/s 54F - computation of LTCG arising out of the development agreement cum GPA - Assessing Officer has accepted that the assessee has acquired the flats as on 9.11.2009 and therefore, in the year 2012 when the assessee has sold the flat, the holding period has to be held as more than 3 years and the provisions of sub-section 3 of section 54F are not applicable - HELD THAT:- As gone through the Development Agreement cum GPA, find that the assessees have given their landed property for development and their share of flats have been identified and allotted by way of the said agreement itself.
Therefore, the respective CIT (A)’s in the case of Smt. Devi Reddy Renuka and Smt. Nallapattu Saraswati have held that the assessees therein are deemed to have acquired the property on the date of development agreement itself and thus, the period of holding has to be held to be more than 3 years. In the case of coowners, the Revenue cannot take a different stand. If the Revenue has accepted the decision of the CIT (A)’s, in the cases of Renuka and Saraswati, we are of the opinion that the same decision has to be taken in the case of the assessees before this Tribunal also.
Therefore, by adopting the principles of consistency and uniformity, I hold that the exemption u/s 54F cannot be withdrawn in the relevant A.Ys and the capital gain arising out of sale of flat has to be treated as LTCG as done in the case of co-owners. Assessee’s appeals are allowed.
-
2021 (5) TMI 870 - CESTAT ALLAHABAD
Quantum of interest on refund - grant of interest at 12% instead of 6% - time limitation for calculation of interest - appellant sought that the interest should be calculated from the date of deposit of the amount - HELD THAT:- In the present case, the provisions of section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31.01.2017, which order has attained finality - There is no provision in the Excise Act, which deals with refund of revenue deposit and so rate of interest has not been prescribed, when revenue deposit is required to be refunded.
In RIBA TEXTILES LTD VERSUS COMMISSIONER OF CE & ST, PANCHKULA [2020 (2) TMI 602 - CESTAT CHANDIGARH], the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application - the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @12% per annum seems to be appropriate.
Appeal allowed - decided in favor of appellant.
-
2021 (5) TMI 869 - CESTAT NEW DELHI
Liability of Interest - point of taxation - point of time when liability to pay service tax on re-insurance services provided under the pool agreement arises - extended period of limitation - penalty.
Extended period of limitation - HELD THAT:- Even when an assessee has suppressed facts, the extended period of limitation can be evoked only when “suppression’ is shown to be willful and with an intent to evade payment of service tax - Commissioner has not recorded any finding that even if the appellant had suppressed the fact of having received the amount, it was willful and with an intent evade payment of service tax. In fact, the Commissioner observed that there was no malafide intention on the part of the appellant to suppress this fact - the extended period of limitation could not have been invoked. Any demand up to March 2013 would, therefore, barred by limitation.
Delay in Payment of Service Tax - HELD THAT:- Section 64VB (5) of the Insurance Act read with rule 59 of the Insurance Rules, clearly excludes re-insurance from the general rule that no risk should be assumed until the premium is paid. The consideration in re-insurance policies can be like in any other contract (past, present or future).
The issue, therefore, that arises for consideration is when service is rendered and service tax is due but the appellant is not able to pay it until the accounts are squared up and thereby delays paying the service tax, than whether in such a situation the appellant is liable to pay interest on the delayed payment, considering that the delay is not on account of the fault of the appellant - A similar issue comes up often in Central Excise matters when the transaction value of the goods is unknown, either partly or fully when the goods are cleared. This happens with Government contracts which fix the price based on a formula, several elements of which (say cost of raw material or minimum wages of the labour) are not known at the time of clearance. Later, when they get the details, they pay the differential excise duty.
Although this is a service tax matter, the provisions are pari materia and if service tax is due on a date but is paid much later because data is not available with the assessee, interest has to be paid. Thus, the demand of interest from the appellant for the period post March 2013 upto March 2014 is justified.
Penalty - HELD THAT:- While dealing with the issue as to whether the extended period of limitation under the first proviso to section 73 of the Finance Act could have been invoked in the facts and the circumstances of the case, it has been found as a fact that the suppression of facts was not willful nor was there any intent to evade payment of service tax. Thus, for all the reasons stated while dealing with the extended period of limitation, penalty under section 78 of the Finance Act could not have been imposed upon the appellant. The Commissioner was, therefore, not justified in imposing penalty under section 78 of the Finance Act as there was no deliberate suppression of facts with intention to evade payment of service tax.
In the result it is held that since the extended period of limitation could not have been invoked the demand of any interest up to March 2013 is not justified. However, the demand of interest for the period post March 2013 up to March 2014 is sustained. Penalty could also not have been imposed under section 78 of the Finance Act - Appeal allowed in part.
-
2021 (5) TMI 868 - CESTAT NEW DELHI
Refund of Excise duty paid under protest - method of valuation of physician samples - refund application filed by the appellant was rejected by placing reliance upon the Circular dated 25.04.2005 that prescribed for payment of duty under rule 4 of the Valuation Rules - appellant followed the practice of valuation of physician samples on cost of production + 10% profit and also enclosed therewith a list of products cleared on assessable value (cost+10%) - Section 11A of the Excise Act - HELD THAT:- In the present case, the appellant only deposited an amount of ₹ 43,57,437 /- under protest but specifically stated that it was not accepting the contention of the department that it was required to pay differential duty from 25.04.2005 to 30.09.2006. It cannot, therefore, be urged that the appellant had deposited any amount under sub-section (1)(b) of section 11A of the Excise Act, in which case only notice was not required to be served on the appellant - it was obligatory on the part of Central Excise Officer to have issued a notice to the appellant for payment of the short paid amount of duty and, thereafter, adjudicate upon it. In the present case, however, the amount deposited by the appellant under protest has been appropriated towards differential excise duty without issuance of any notice contemplated under section 11A of the Excise Act.
It has now to be seen whether an amount of ₹ 14,38,359 /- could have been appropriated as interest for alleged late payment of the amount of ₹ 43,57,427/-, which was deposited under protest (from rebates claimed and sanctioned to the appellant) - In the first instance, when the order rejecting the refund claim filed by the appellant has been set aside and the appellant is entitled to the refund amount, there is no reason as to why the appellant should be asked to pay any interest for the alleged delay in deposit of said the amount. Secondly, no notice was issued to the appellant for deposit of this interest amount. In the absence of any notice having been issued demanding this amount, for the reasons stated above, the amount could not have been appropriated.
The appellant would be entitled to refund of ₹ 43,57,427 /- claimed in the application filed on 05.11.2008. The order for appropriation of ₹ 14,38,359/- towards interest, as confirmed by the Commissioner(Appeals) by order dated 16.08.2018, is also set aside - appeal allowed - decided in favor of appellant.
-
2021 (5) TMI 867 - CESTAT NEW DELHI
Valuation of imported goods - related persons - Subvention payments by a parent company to its loss making subsidiary - capital receipts - impugned order has been passed after an inordinate delay of more than one year after hearing - submissions made before the first appellate authority were not considered.
Delay in passing the impugned order and allegations of pre- meditated order - HELD THAT:- It is not a healthy practice to pass an order after such a long time. However, no legal provision has been brought on record to show that the delay renders the impugned order invalid. The delay, though, highly undesirable, does not invalidate the impugned order in the absence of any such legal provisions - appellant argues that the impugned order is pre-meditated. This is an allegation in the appeal but this imputation against the learned first appellate authority is not backed by any evidence and needs to be dismissed.
Arguments that the earlier SVB order stops the department from opening up the issues in the second SVB order - HELD THAT:- Legally speaking nothing stops the officer from examining each import made by an importer from a related person to see if the relationship affected the price. As it will be rather cumbersome to do so, the investigation done once and an SVB order issued is normally applied for imports for a period of three years assuming that in all these years, the price is not affected by the relationship. Both the SVB orders issued in this case clearly indicate that they are subject to occasional review and also a final review after three years - there are no no force in the argument of the appellant that since the first SVB order had found that their relationship with the foreign supplier had not affected the prices at that time, the department cannot examine if such is the case in all subsequent imports.
True Up payments - HELD THAT:- True Up is an arrangement between the appellant and the parent company. No law requires such a payment nor can it influence the transaction prices. Let us say, the appellant has suffered a loss of $ 10,000. The shareholders suffer this loss in proportion to the shares held by them. Since the parent company owns 99.99% of the shares of the appellant, it suffers a loss of $9,999 on their investment in the appellant. Alternatively, the parent company can transfer to the appellant to cover some or all of the loss as True Up payment to keep the appellant company afloat. The parent company need not pay as True Up any of this loss or may pay as True Up some or all of the loss. The losses incurred by the appellant have no bearing on the invoice value whether the losses are recouped by the parent company in the form of True Up payments or not.
Expenses on marketing and advertisement, etc. - HELD THAT:- Rule 10 (1) (e) requires that any payment made as a condition for sale to either the seller or to a third party to satisfy the obligations of the seller is to be included in the value. We find that if the appellant is responsible for certain activities such as customs, taxability, inventory costs, distribution and sales promotions including advertising and marketing for its entire business in India, it cannot be called a payment to their foreign supplier but would be managing affairs related to its own business. It would have been a different case, if the appellant was required, as per the agreement to promote, at its cost, the sales by the foreign suppliers to other customers in India or make some payment on behalf of the seller to a third party. In such a case, some expense would have been incurred by the appellant which could have been examined to see if it formed an additional consideration for the sale of the goods to the appellant - The appellant is a distributor and is in the business of selling the cars which necessarily requires them to deal with imports, pay taxes, promote sales, advertise, etc. These, in our considered view, cannot be termed as expenses incurred on behalf of the foreign supplier although the foreign supplier would also indirectly benefit if the appellant’s business improves. The foreign supplier is also independently selling the goods (cars) to embassies, etc. and there is nothing on record to show that the appellant has incurred any expenses to promote such sales.
Comparison with prices of sales to independent buyers - HELD THAT:- The premium for the additional features and customisation is decided by the manufacturer and paid for by those independent customers. The difference between sale in retail and sale in bulk also must be accounted for. There is nothing in the impugned order that the Commissioner (Appeals) has come to prima facie conclusion based on some data that the additional features and the difference in quantities do not account for the price difference. It is not also indicated how the original authority is expected to achieve this quantification. We, therefore, find no substance in such a direction in the impugned order for re-examination.
Another finding in the impugned order is that the adjudicating authority has not verified the balance sheets to conclude that no amount is paid or payable directly or indirectly to or on behalf of the supplier of the imported goods for engineering, development, art work, design work and plans and sketches undertaken elsewhere than in India - there are nothing in the order to show that some payments were noticed by the Commissioner (Appeals) towards engineering, development, art work, etc. If the Commissioner (Appeals) could not, after considering the department’s appeal for one year after concluding the hearing, find that some payments were made towards these, it is not justifiable to brush aside the order of the original authority on some suspicion without any basis.
The last of the findings in the impugned order is that the original authority had come to a conclusion that the relationship has not affected the price merely on the importer’s statements. We find that original authority had given findings based on analysis. If the Commissioner (Appeals) found some reason to conclude otherwise, he could have so decided after pointing out how the relationship affected the invoice price and what elements should be added to the invoice price to arrive at the value but he did not.
The order dated 12.04.2018 passed by the Commissioner (Appeals) allowing the appeal filed by the Department and setting aside the order-in-original cannot be sustained - Appeal allowed - decided in favor of appellant.
-
2021 (5) TMI 866 - CESTAT CHANDIGARH
Levy of penalty on shipping line u/s 112 of the Customs Act, 1962 - mis-declaration of goods in description as well as in quantity in bills of landing - HELD THAT:- It was asked by the ld. AR “please let me know whether the seal of the container was intact or not?” This was answered in affirmative. As the fact has not been disputed by the Revenue and the mis-declaration of weight and description of the goods was found at the time of physical examination of the goods.
Reliance placed in the case of M/s M S C Agency India Pvt Ltd [2013 (11) TMI 1230 - CESTAT CHENNAI] where it was held that when the seal of the container was intact, in that circumstance, penalty on the shipping line cannot be imposed - The said decision is based on the decision of Hon’ble Bombay High Court in the case of Shaw Wallace & Co. Ltd. v. Asstt. Collector [1986 (7) TMI 106 - HIGH COURT OF JUDICATURE AT BOMBAY].
The penalty on the appellant cannot be imposed - appeal allowed - decided in favor of appellant.
-
2021 (5) TMI 865 - ITAT CUTTACK
Applicant seeking approval u/s 80G(5)(vi) - denying approval and registration u/s 80G of the Act is that the Trust’s activities includes religious activities and violating the provisions of section 80G(5)(vi) - CIT (E) rejected the application of the assessee on the ground that the main object of the assessee trust is to establish, construct, maintain and run a Gurudwara at Puri and Nayagarh providing for regular daily seva puja according to the Sikh religious custom, tradition, therefore, the activities of the trust is religious and violating the provisions of section 80G(5)((iii) - HELD THAT:- We are not in agreement with the contention of the ld CIT DR as from the relevant part of the impugned order, it is clear that the CIT (E) has denied registration only on one ground violation of clause (iii) of sub-section (5) of Section 80G. The revenue cannot be allowed to make a new case. Even if we see that the ld counsel of the appellant has not contended that the Trust’s activities are centralised to only a few objects cannot be a ground for denying registration u/s.80G of the Act as this is not required to conduct activities on all the objects to get approval & registration u/s.80G and it is also not a requirement of section 80G of the Act to conduct activities on all the objects stated in the Trust Deed. Therefore, we are of the considered view that the contention of ld CIT DR are not found to be acceptable in the present case.
The order of ITAT Jaipur in the case of Shri Bair Singh Ji Narayan Singh Ji Memorial Sansthan [2018 (12) TMI 1887 - ITAT JAIPUR] relied on by the assessee also provides support to the grounds of the assessee. In this order, the Co-ordinate bench has relied to the judgment of Umaid Charitable Trust vs The Union of India [2008 (5) TMI 232 - RAJASTHAN HIGH COURT] wherein, it was held that unless objection of the assessee trust is for spending its income for a particular religion and it is so found in the Trust Deed, the Revenue cannot reject application seeking registration u/s. 80G of the Act merely because the Trust has incurred some expenditures for certain activities within its charitable objects.
The decisions relied by the assessee support the case of the assessee. Accordingly, in the absence of any other adverse finding of the CIT(E), as required by law for granting approval u/s 80G of the Act, regarding the charitable character and genuineness of the activities carried out by the assessee/applicant, the impugned order is not only unsustainable based on unreasonable ground but also perverse being not in accordance with the provisions of the Act. Therefore, we direct the ld CIT (E) to grant approval u/s. 80G(5)(vi). - Decided in favour of assessee.
-
2021 (5) TMI 864 - ITAT DELHI
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Eclerx Services Limited - functions of this company are different than the functions of the assessee company. Besides this, significant expenditure on Advertising and marketing expenses were made by this comparable company and there is significant intangible assets owned by this company. There is no segmental details available of this company. All these factors determine that Eclerx Services Limited is not a good comparable. Therefore, we direct the TPO to exclude this comparable from the final set of comparables.
TCS-e-Serve Limited - Functions of TCS-e-Serve Limited are different than the functions of the assessee company. Besides this, TCS e-Serve has a very high turnover. There was acquisition by TCS Limited/Brand Value of TCS in the present assessment year. All these factors determines that TCS E-Serve Ltd. is not a good comparable. Therefore, we direct the TPO to exclude this comparable from the final set of comparables.
Infosys BPO Ltd. - It is pertinent to note that the functions of Infosys BPO Ltd. are different from the functions of the assessee company. Besides this, the brand value of Infosys BPO Ltd. enjoys the benefit of brand value of "Infosys", one of world's leading companies. It has consistently spent substantial amount of money on brand building. There was an extraordinary financial events during Financial Year 2011-12 as it acquired 100% voting rights in Portland Group Pty. Limited (strategic sourcing & category management services provider based in Sydney, Australia) and also invested in Mc Camish Systems LLC. All these factors determines that Infosys BPO Ltd. is not a good comparable. Therefore, we direct the TPO to exclude this comparable from the final set of comparables.
Acropetal Technologies Ltd.- It is functionally different as the Healthcare Segment has been taken into account. The company is engaged in software development. It provides healthcare services which includes innovation, patient life cycle management, physician and clinical life cycle management, hospital administration management, drug discovery and disease life cycle management. There is significant AMP expenses. Acropetal acquired two US based companies subsequent to which it will get into IP development by exploring the expertise and design skills available in the Silicon Valley. It has un-allocable expenditure. All these factors determine that Acropetal Technologies Ltd. is not a good comparable. Therefore, we direct the TPO to exclude this comparable from the final set of comparables.
E4e Healthcare Services Pvt. Ltd is engaged in the healthcare business services which are functionally different. The assessee company is engaged in providing IT enabled services to banks who issued credit cards. Thus, E4e Healthcare Services Pvt. is not a good comparable. Therefore, we direct the TPO to exclude this comparable from the final set of comparables.
Exclusion of R Systems International Ltd.:company was rejected as a comparable on the ground that it has different financial year ending - The contention of the Ld. AR that the data for the entire FY can be extrapolated from its quarterly filings made in the stock exchange, appears to be plausible when the same is available in the public domain. The reliance of the decision of McKinsey Knowledge Centre [2015 (3) TMI 1226 - DELHI HIGH COURT] is relevant wherein it is held that if the data pertaining to a comparable having a financial year ending other than end-March can be reasonably extrapolated and used. Therefore, we direct the TPO/AO to verify this comparable and its functions as well as the principle laid down in the decision of the Hon'ble Delhi High Court and if found suitable, this comparable be included in the final list of the comparables. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.
Incorrect computation of assessee's margin - HELD THAT:- In the financial statement for the relevant year (F.Y. 2011-12), the auditor has made a clear disclosure that no revenue has been recognized on account of services rendered to SBI despite having incurred a cost of ₹ 3.2 crore. These facts were totally ignored by the TPO/AO and therefore, in the interest of justice, we deem it proper to remand back this issue to the file of the TPO/AO for proper verification and adjudication as per the facts and law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.
Incorrect calculation of Proportionate Adjustment by the TPO - HELD THAT:- AR's submission during the hearing was that this transaction was reported as an international transaction only out of abundant caution. But, the related party transaction or AE transactions amounts to only ₹ 11,08,36,171/-. After perusal of the records, these facts have to be verified by the TPO/AO which was not done by the Revenue authorities. It appears that the Computer Sciences Corporation, USA and CSC Australia Pty Ltd., both are not associated enterprises of the assessee as set out by the provisions under Section 92A(1) or 92A(2) of the Income Tax Act, 1961. But the TPO ignored these facts and while computing the proportionate adjustment has considered the operating expenses for related party transaction as ₹ 24.01 crores, thereby, calculating the proportionate factor as 13.34%. Therefore, we remand back this issue to the file of the TPO/AO and after verifying the transactions between Computer Sciences Corporation, USA and CSC Australia Pty Ltd., the same should be taken cognizance as per the facts and provisions of Income Tax Act, 1961. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.
Disallowance of license fee - HELD THAT:- Issue decided in favour of assessee as relying on own case for A.Y. 2007-08, 2008-09, 2010-11 and 2011-12.
Short grant of prepaid taxes and erroneous levy of interest - HELD THAT:- From the perusal of record, it appears that the TDS credit as claimed by the assessee in revised return of income was not looked into by the Assessing Officer. Therefore, we remand back this issue to the file of the Assessing Officer for proper verification of the claim of TDS credit and grant the same as per the provisions of law.
-
2021 (5) TMI 863 - ITAT CUTTACK
Addition both in the hand of the Trust as well as in the hands of the assessee - trustee - double addition - HELD THAT:- There is no dispute to the fact that the amount was the fixed deposit made in the assessment year 1999-2000. But similar addition in A.Y. 1999-2000 in assessment order dated 31.12.2007 was made in the name of the Trust, Satya Sai Education Trust and was already taxed. CIT(A) in the order dated 25.1.2007 adjudicating the appeal of the assessee has categorically held that for Assessment years: 2000-2001 and 2001-2002, the fixed deposits were of the Trust and not of this Assessee.
Therefore, the impugned addition made by the A.O. and confirmed by the learned CIT(A) is not sustainable, being double addition, has no legs to stand, as such, the same needs to be deleted. Further, the impugned fixed deposits were already assessed in the hand of the Trust much prior to the date of this Assessment, therefore, the contention of ld D.R. that the addition made in the hand of the Trust was on protective basis, hence he added it is added on substantive basis in the name of the assessee is not acceptable.
DR did not controvert the very relevant part that on maturity, the amount of FD was received and credited to the account of the Trust not to the assessee When the fixed deposits were of the Trust and treated as income of the Trust, the same amount made in the name of the assessee is directed to be deleted because this amounts to double taxation. - Decided in favour of assessee.
Consequential addition being treated as interest income is also directed to be deleted.
Addition being agricultural income - find no positive substance in the contention of the ld A.R., therefore, same is confirmed
-
2021 (5) TMI 862 - ITAT SURAT
Penalty u/s 271(1)(C) - transfer pricing adjustment/arms length price adjustment of International Transaction relation to quasi-capital - HELD THAT:- Since the quantum additions have been deleted, by Tribunal for A.Y. 2009-10 and 2010-11 [2020 (4) TMI 522 - ITAT AHMEDABAD] therefore, penalty would not survive, hence we delete the penalty for A.Y. 2009-10 and 2010-11.- Decided in favour of assessee.
............
|
