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Showing 1 to 20 of 1569 Records
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2024 (5) TMI 1570
TP Adjustment - external TNMM resulting adjustment on account of ALP of international transactions - HELD THAT:- We find merit in the argument of the Ld. Counsel that no adjustment on account of ALP of international transactions is called for. We have given a thoughtful consideration to the entire facts of the case and submissions/contentions/arguments of both parties and are of the considered view that this issue is squarely covered by the decision of the Hon’ble Delhi High Court in case of the assessee [2024 (9) TMI 739 - DELHI HIGH COURT].
We therefore, following the reasoning given in case of the assessee [supra] set aside the order of the Ld. CIT(A) and delete the adjustment on account of ALP of international transactions - Decided in favour of assessee.
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2024 (5) TMI 1569
TP adjustment - adjustment of the assessee's advertising and market promotion (AMP) expenditure as an international transaction - assessee submitted that the AMP adjustment is the only issue under appeal for the other impugned AYs as well, which are also covered under the APA and reiterates the same submissions as detailed above for the other impugned AYs as well - HELD THAT:- Upon careful consideration of the impugned APA signed between the assessee and the CBDT, we find that the said APA is valid for AYs 2014-15 to 2018-19 and hence all the four pending appeals would fall under the purview of said APA. It is noted that Para-3, 4, 5, & 6 clearly lay down the scheme of working which has to be followed by the assessee while reporting its business affairs.
It is also be noted that the assessee has reported its financial transactions in complete fulfilment of the stipulations postulated in the said APA. Accordingly, there was no case for any adjustment to be made by the TPO and for the DRP to reiterate TPO’s actions. The addition made by the AO is thus in conflict with the agreements done in the APA and consequently deserves to be quashed and set aside. Accordingly, the addition made by the AO vide his order dated 05.10.2018. In compliance to directions of DRP dated 27.09.2018 is deleted and the ground of appeal no.2 raised by the assessee is allowed.
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2024 (5) TMI 1568
Deduction u/s 80P(2)(a)(i) and 80P(2)(d) - interest income earned by the assessee from deposits made by it with Co-operative bank - whether assessee by holding that the assessee is a Co-operative Society and not a Co- operative Bank and is entitled for deduction u/s 80P? - HELD THAT:- Assessee collects deposits from its members by way of fixed deposits, saving deposits and recurring daily deposits, etc. AO observed that assessee gives various types of loans/ advances viz. team loans, against hypothecation or mortgage, vehicle loans, personal loans, housing loans, education loans, loan/ overdrafts against fixed deposits or NSC or LIC receipts etc. only to its members, but no cash credit facility, letter of credit, no export credit, packing credit etc. and no guarantee. Assessee earns interest from its members under various credit schemes and pays interest to its members under various deposit schemes.
Identical issues with varying amounts came up before the coordinate bench in assessee’s own case in [2024 (5) TMI 1567 - ITAT MUMBAI] wherein it was held that assessee is a credit cooperative society and not a cooperative bank within the meaning of Banking Regulation Act, 1949, allowing the claim of deduction u/s. 80P(2)(a)(i) and 80P(2)(d). Both the grounds taken by the Revenue in the present appeals are squarely covered by the said order, there being no material change in the relevant facts and applicable law. No reason to interfere with the findings arrived at by the CIT(A) in allowing the claim of the assessee for deduction u/s. 80P(2)(a)(i) and 80P(2)(d) of the Act. Appeals of the Revenue are dismissed.
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2024 (5) TMI 1567
Deduction w/s 80P(2)(d) interest income earned from Co-operative bank treating the Cooperative bank as Co-operative society - Co-operative Society and Co- operative bank are distinct entity and it is essential for a cooperative society to loose its status as a Co-operative society so as to turn into a co-operative bank and to acquire license from the RBI so as to conduct banking business - HELD THAT:- As in assessee’s own case [2023 (9) TMI 1687 - ITAT MUMBAI] the coordinate bench has held that assessee is a cooperative credit society eligible for benefit of deduction u/s. 80P(2)(a)(i) and that Section 80P(4) restricting the benefit of deduction does not apply to the assessee since it is neither a cooperative bank nor a cooperative society holding license from RBI for banking business. Also, with detailed exposition on the issue in hand in the case of The Mavilayi Service Cooperative Bank [2021 (1) TMI 488 - SUPREME COURT] and Kerala State Cooperative Agricultural and Rural Development Bank [2023 (9) TMI 761 - SUPREME COURT] we do not find any reason to interfere with the well analysed and elaborate finding arrived at by the ld. CIT (A) in allowing the grounds raised by the assessee on this issue. Accordingly, ground no. 1 and 3 of the Revenue are dismissed.
Having held that assessee is a credit cooperative society and not a cooperative bank within the meaning of Banking Regulation Act, 1949, provisions of Section 36(1)(viia)of the Act do not apply in the case of assessee, which has been rightly held by the CIT(A). Accordingly, ground no. 2 of the Revenue is dismissed.
Deduction u/s 80P(2)(d) - We are of the considered view that though the co-operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, however, since a co-operative bank continues to be a cooperative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of cooperative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank, would be entitled for claim of deduction u/s 80P(2)(d) of the Act. We thus, hold that assessee is eligible for claiming deduction u/s. 80P(2)(d) disallowed by the AO.
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2024 (5) TMI 1566
Demand for service tax along with interest and penalty - non-payment of service tax under commercial training and coaching services on hostel fees received for non-residential courses - Reversal of CENVAT credit - improper registration under section 77(1) of the Finance Act - invoking extended period of limitation - HELD THAT:- It is a settled principle of law as stated in the Circular No 109/3/2009-ST dated 23.02.2009 wherein it has been stated that once two contracting parties are acting on principal-to principal basis, the activities are not covered under service tax. In this case, the agreement between the parties clearly shows that it is a Revenue Sharing agreement entered on principal to principal basis.
We have perused the Education and Training Service Franchise Agreement entered between CMC and the Appellant. The terms of the agreement clearly shows that it is a Franchisee Agreement. Thus, if at all service tax is payable, it will be under the category of 'Franchisee Service'. But, no service tax has been demanded under the category of ' Franchisee Service' in the impugned order.
As the agreement between the parties clearly shows that it is a Revenue Sharing agreement entered on principal to principal basis, we hold that no service tax liability arises on the amount received by the appellant from CMC as a part of their share as per the agreement. Accordingly, we hold that the demand of service tax confirmed in the impugned order on this count is not sustainable and hence we set aside the same.
We observe that Sale of Newspaper – Jibika Dishari and Swabhumi, Sale of magazine namely RICE Times and Sale of forms and prospectus of the appellant, are all tantamount to sale of goods which is not leviable to service tax. Thus, the demands confirmed in the impugned goods on account of the above said sale goods is liable to be set aside and accordingly, we set aside the same.
We observe that the library facility is akin to any standalone libraries offering membership to readers. For the said facility, we find that separate invoice is being raised by the Appellant towards library membership service, library development charges and no service tax has been charged by them.
We observe that Section 65(26) of the Finance Act, 1994 defines commercial training or coaching services as any training or coaching provided by a commercial training or coaching centre. Further, Section 65(27) of the said act defined commercial training or coaching centre as any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than sports. We observe that the library membership (optional) given by the appellant is not towards providing any Commercial training or coaching services under section 65(105)(zzc) of the Finance Act or under any taxable service liable to service tax under the Finance Act till 01.07.2012 and hence the same is liable to be dropped.
In this case, the appellant has acted on a bonafide belief that they are not liable to service tax on the basis of various judicial pronouncements available on these issues. Accordingly, we observe that proceeding if any, can be instituted only for a period of 12 months. In the Appellant’s case, demand for only 2011-12 could have been raised vide SCN dated 15.10.2012. Thus, we hold that the demand confirmed by invoking extended period of limitation is liable to be set aside. However, we observe that the demand is respect of the three major issues disputed by the appellant are liable to be set aside on merit itself. Hence, we hold that the demands confirmed in the impugned order does not survive.
Hence, we pass the following order:
(i) The demand of service tax of Rs.35,86,321/- confirmed in the impugned order on account of nonpayment of service tax under commercial training and coaching services on hostel fees received for non-residential courses is set aside.
(ii) The demand of service tax of Rs.25,50,658/- confirmed in the impugned order under business support services on share of fees received from CMC Limited, is set aside.
(iii) Service tax of Rs.60,97,878/- confirmed in the impugned order on account of sale of Forms, News papers and Library subscription under commercial training and coaching centre services, are set aside.
(iv) We uphold the demand confirmed on account of short payment of Rs.2,10,073/- due to accrual accounting. The service tax of Rs. 84,249/- paid along with interest on miscellaneous receipts is upheld. The reversal of cenvat credit of 1,30,295/- along with interest is upheld. Since all the amounts was paid prior to issue of the notice, demand of penalty imposable on these payments are set aside.
(v) The penalty of Rs.10,000/- imposed on account of improper registration is set aside
(vi) The appeal filed by the appellant is disposed on the above terms.
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2024 (5) TMI 1565
Demand of service tax along with interest and Penalty - membership fees under "Club & Association Service" and amounts paid under reverse charge for "Transport of Goods by Road Service" and "Rent a Cab Service" - Provisions relating to negative list regime - show cause notice issued as per the old provisions of the Act - HELD THAT:- We find that the SCN itself was issued without citing any relevant provisions. Therefore, the impugned order confirming the demand as per the SCN under various non-existing legal provisions cannot be sustained.
The impugned order is set aside and the appeal is allowed with consequential relief to the appellant.
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2024 (5) TMI 1564
Deduction u/s 80P(2)(d) - interest income earned by the assessee from deposits made by it with Cooperative bank - HELD THAT:- As relying on Ashok Tower “D” Co. Op. Housing Society Ltd. [2024 (4) TMI 313 - ITAT MUMBAI] we hold that assessee is entitled to claim of deduction u/s. 80P(2)(d) towards interest earned on deposits with cooperative banks. Accordingly, the disallowance made is deleted. This appeal of the assessee is allowed.
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2024 (5) TMI 1563
Depreciation on assets pursuant to the scheme of demerger - assessee company has transferred its fixed assets pertaining to the Speciality Chemicals business to M/s Ciba Speciality Chemicals Ltd as per Schedule A to the scheme of arrangement - HELD THAT:- We found that the issue in respect of value of block of assets has been already considered in the assessee’s own case for the A.Y 2002-03 [2024 (3) TMI 1438 - ITAT MUMBAI] wherein held that the assets in the block has to be evaluated every assessment year and as per provision 43(6)(C)(B), it clearly indicates that the value has to be reduced of the moneys payable in respective of any assets falling within that block which is sold/discarded/demolished or destroyed.
In the given case, the block does not consist the assets, which are transferred in the demerger in the A.Y. 1997-98. These particular assets are not in existence in the beginning of the year and it can be considered as discarded in the provisions with “NIL” value. This issue needs to end some point of time. In that case, the value of the assets has to be written off this year and to be claimed as loss in the statement of income (instead of depreciation). Therefore, we are inclined to direct the AO to treat the opening balance of the assets to the extent of assets, which was already transferred to the demerged company as loss of assets or discarded.
Accordingly, we follow the judicial precedence and direct the AO to allow depreciation and the ground of appeal is allowed in favour of the assessee.
Disallowance of expenditure on computer software licence fees - HELD THAT:- As relying on the earlier year A.Y. 2002-03 [2024 (3) TMI 1438 - ITAT MUMBAI] that the expenditure was revenue in nature. Thus, we direct the AO to allow the deduction of expenditure on computer software licence fees and this ground of appeal of the assessee is allowed.
Advance written off predominantly Modvat credit claims receivables - HELD THAT:- The advance written off predominantly Modvat credit claims receivables was first time raised by the assessee in this assessment year in comparison to A.Y.2002-03, were the claim was only for advances written off and was allowed by the Honble Tribunal.
AR relied on decision of Wackhardt International Ltd. [2009 (2) TMI 138 - BOMBAY HIGH COURT] We are of the opinion that the assessee should not suffer for non filing of material information and the Assessment order does not discloses these facts of Modvat issue. Accordingly, to meet the ends of justice, we restore the disputed issue to the file of the Assessing officer to examine, verify and allow the claim taking into consideration the assessee own case and judicial decisions. Assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow this ground of appeal of the assessee for statistical purposes.
Excluding 90 per cent of receipts from Interest on employee loans, Interest on overdue debtors, Sales tax set off claims, Insurance claims realized, Scrap sales income, cash discount, exchange gains, other miscellaneous write back of liabilities, discounts, etc, cost of services recovered, Profit under Section 41(3) on sale of R & D assets while working out the 'profits of the business' - HELD THAT:- We respectfully follow the decision of the Hon’ble ITAT in the assessee’s own case for earlier year assessment year and direct the AO to delete the addition and we allow this ground of appeal in favour of the assessee.
Capital gains arising from transfer of the plot adopting the fair market value lower than the value adopted by the assessee - As following the judicial precedence as in earlier year A.Y.2002-03 [2024 (3) TMI 1438 - ITAT MUMBAI] and direct the AO to adopt the fair market value as determined by the D.V.O as on 1-04-1981.Accordingly, we allow the ground of appeal of the assessee .
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2024 (5) TMI 1562
Income deemed to accrue or arise in India - benefit under the relevant Double Tax Avoidance Agreements - income derived by the assessees through data transmission services - HELD THAT:- As on going through the judgment rendered in Tribunal we find that the issues raised here stand concluded against the appellant in light of the decision rendered in Asia Satellite Telecommunications Co. Ltd. [2011 (1) TMI 47 - DELHI HIGH COURT] as well as New Skies Satellite BV [2016 (2) TMI 415 - DELHI HIGH COURT] as held assessee Not liable to pay tax as royalty - interpretation advanced by the Revenue cannot be accepted. The question of law framed is accordingly answered against the Revenue.
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2024 (5) TMI 1561
Disallowing claim of business loss - Allegation of share transactions in certain penny stock companies - assessee from the purchase & sales undertaken within 7-9 months thereby resulting in huge loss shown in such a short time span which appears quite unrealistic and unreasonable - HELD THAT:- In this case the fact related to the dispute is that the assessee has incurred a loss which the AO has disallowed considering it as a bogus loss claimed by the assessee. The fact related to that claim is that the assessee has made out of the disclosed sources in the shares of the companies as mentioned herein below, after making the investment in 7 - 8 month the assessee company noted that the investment made by the assessee getting deteriorated and therefore, sold those share purchased by the assessee and in that process the assessee has suffered the loss.
Thus, as it is evident that the primary onus that is casted upon the assessee has discharged by the assessee and the revenue has merely based on the generalized way and that too while dealing with the cases of 10(38) relied upon the detailed investigation report where in there is no reference as the broker of the assessee with whom the assessee has undertaken the transaction is not discussed or covered and there is no reference of either of the assessee or to his broker the addition cannot be made in the hands of the assessee. See Affluence Commodities (P) Ltd [2024 (4) TMI 199 - GUJARAT HIGH COURT] held as assessee has proved the genuineness of the transactions and established on online trading platforms that it had no control whatsowever on share prices and thus, incurred losses in shares. It was also found by both the authorities that the assessee sold only the part of the shares and remaining shares have been held by the assessee in the subsequent assessment year also. With regard to shares of Kappac Pharma Ltd., it was rightly held by the Tribunal that since the market rate was lower, the assessee had incurred business loss though the shares are not sold.
Addition on account of alleged commission - Since in ground no 1 we have considered the loss as genuine the addition made in the hands of the assessee does not survive and therefore, the same is directed to be deleted.
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2024 (5) TMI 1560
Validity of reopening of assessment - assessee company was a beneficiary of certain bogus purchase bills - Mechanical application of mind by the A.O while recording the "reasons to believe" - HELD THAT:- AO in the present case after considering the information that was shared with his office by the Dy. DIT(Inv.)-1, Raipur, had duly analyzed the same and arrived at a bonafide belief that the income of the assessee company chargeable to tax had escapement, therefore, there is no substance in the contention of the AR that the A.O. had mechanically reopened its concluded assessment without independent application of mind and carrying out necessary verification on his part. Accordingly, the order passed by the CIT(Appeals) to the said extent is set aside.
AO had reopened the concluded assessment of the assessee company based on a mere "change of opinion" - A mere fresh application of mind by the AO to the same set of facts as were there in the course of the original assessment proceedings would not justify reopening of the concluded assessment based on a mere "change of opinion".
We are unable to fathom as to on what basis, it is claimed by the Ld. AR that the reopening of the case of the assessee company is based on a mere "change of opinion" on the same set of facts as were available before the A.O. in the course of the original assessment proceedings. Also, it would be relevant to point out that the letter wherein the AO was informed about receipt of share capital/premium by the assessee company from 7 investor companies was accompanied with supporting annexures which, inter alia, included a statement of one Shri Anjani Banka that was recorded by the Dy. DIT, Unit-3, Kolkata, wherein the aforesaid person had stated that he was a director of one of the share subscriber company, viz. M/s. Banka Financial and Securities Pvt. Ltd. which was engaged in providing accommodation entries in lieu of commission. As the aforesaid information a/w. the supporting annexures were not available before the A.O. in the course of the original assessment proceedings that had culminated vide his order u/s. 143(3) of the Act, dated 11.08.2014, therefore, we are unable to concur with the CIT(Appeals), who had observed that the reopening of the concluded assessment of the assessee company was based on a mere “change of opinion” and thus, had, inter alia, quashed the reassessment for want of valid assumption of jurisdiction by the A.O. We, thus, not being able to persuade ourselves to subscribe to the aforesaid observations of the CIT(Appeals) set-aside his order to the said extent.
AO had reopened the case based on a reason to suspect - Neither the sufficiency of the material nor the quality of the belief arrived at by the A.O. can be called into question by the assessee at the stage of reopening of the case. Our aforesaid view is fortified by the judgment of Raymond Woollen Mills Ltd. [1997 (12) TMI 12 - SUPREME COURT] We, thus, are unable to concur with the contention of the Ld. AR that reopening of the concluded assessment of the assessee company was prompted by a reason to suspect. As there was material before the A.O. to arrive at a bonafide belief that the income of the assessee company chargeable to tax had escaped assessment, therefore, we find no infirmity in the assumption of jurisdiction on his part for initiating the reassessment proceedings. Accordingly, we are unable to accept the view taken by the CIT(Appeals) to the extent he had concurred with the assessee company that the A.O had reopened the concluded assessment based on a reason to suspect and, thus, had vacated the reassessment order on the said count.
AO had traversed beyond the scope of his jurisdiction by reopening the concluded assessment of the assessee in violation of the "1st proviso" to Section 147 of the Act - As in the case before the Hon’ble Apex Court in Marico Limited [2020 (6) TMI 436 - SC ORDER] the concluded assessment in the case of the present assessee company before us for the year under consideration, i.e., A.Y 2012-13 had been reopened vide notice u/s 148, dated 30.03.2019, i.e., beyond 4 years from the end of the relevant assessment year, without there being any failure on the part of the assessee company to fully and truly disclose all material facts necessary for its assessment, therefore, as observed by the CIT(Appeals) and, rightly so, the reopening of the concluded assessment of the assessee company would be hit by the “1st proviso” to Sec. 147 of the Act.
We, thus, concur with the view taken by the CIT(Appeals) that the original assessment of the assessee company for AY 2012-13 that was earlier framed under Sec. 143(3), dated 11.08.2014, de hors any failure on the part of the assessee company to fully and truly disclose all material facts necessary for its assessment could not have been reopened by the AO vide Notice u/s 148, dated 30.03.2019, i.e after the expiry of four years from the end of the relevant assessment year.
AO in our considered view is obligated to arrive at a conclusion about the failure on the part of the assessee to disclose necessary facts for assessment after applying his mind and verification of the facts, which we find he had failed to do in the present case. Accordingly, we approve the view taken by the CIT(Appeals), wherein he had observed that the AO had exceeded his jurisdiction and reopened the concluded assessment of the assessee company in violation of the mandate of the “1st proviso” to Section 147 i.e after the lapse of four years from the end of the relevant assessment year, i.e A.Y 2012-13.
AO had grossly erred in law and proceeded with and framed the assessment vide his order u/s. 143(3) r.w.s. 147 of the Act dated 31.12.2019 without passing an order rebutting the objections filed by the assessee company as regards the validity of the reassessment proceedings - As the A.O. in the present case before us had failed to dispose of the objections to the reopening of the case as were filed by the assessee company before him, therefore, the same is clearly in defiance of the law declared by the Hon'ble Apex Court. In our view, the statutory obligation cast upon the A.O to dispose of by way of a speaking order the objections of an assessee as regards the assumption of jurisdiction for the reopening of its case comes with a purpose, i.e. in case objections are decided against the assessee, then the latter may assail the same by filing a Writ Petition before the Hon'ble High Court. Accordingly, in case the A.O fails to dispose of the objections and proceed with and frames the assessment without satisfying the aforesaid mandate of law, then, the assessee would stand divested of the statutory right vested with him as per the aforesaid judgment in the case of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT]
We, thus, respectfully following the aforesaid judicial pronouncements, wherein the Hon'ble High Courts had quashed the reassessment proceedings for the reason that the A.O had without disposing of the objections filed by the assessee to the reopening of its case, had proceeded with and framed the assessment in defiance of the judgment of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] concur with the view taken by the CIT(Appeals) who by adopting a similar reasoning had quashed the reassessment proceedings. Accordingly, the order of the CIT(Appeals) is upheld in terms of our aforesaid observations.
Ground of appeal No.1 raised by the revenue is partly allowed in terms of our aforesaid observations.
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2024 (5) TMI 1559
Deduction u/s 10AA - allocation and apportionment of expenses between eligible Special Economic Zone (SEZ) units and non-eligible units - AO based on the percentage of 62 % to non-eligible unit and 38% to eligible unit being the percentage of sale, apportioned the expenditure - whether the assessee has allocated the cost of exempted unit and non-exempted unit properly or not? - HELD THAT:- Assessee fairly admitted that the assessee under the bona fide belief has not apportioned the expenditure to the extent of Rs. 49,94,866/- to the exempted unit and he has consented that if the same is allocated in the same ratio as decided by the AO i.e. 68% to the non-eligible unit and 32% to eligible unit.
Therefore, based on these observations, the ld. AO is directed to make suitable addition @ 32% of Rs. 49,94,860/- less if any amount already allocated by the assessee if demonstrated by assessee at the time of passing appellate order and the balance amount is directed to be deleted. In terms of these observations, the appeal of the assessee is partly allowed.
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2024 (5) TMI 1558
TP Adjustment - issuance of Letters of Comfort (LOC) to associated enterprises (AEs) - HELD THAT:- The issue is squarely covered by the order of co-ordinate bench in assessee‟s own case for A.Y. 2008-09 [2024 (2) TMI 921 - ITAT MUMBAI] Further, the LOC is continuing from earlier years. The coordinate benches of earlier years are decided in favour of assessee. In earlier years the same addition are fully deleted. We cannot circumvent the orders of coordinate bench. DRP directed @1.5% adopt on ALP. During the hearing the DR was unable to submit any contrary judgement against the order of ITAT. The addition is directed to be deleted. Accordingly, the ground of the assessee succeeds.
Interest charged on delayed receivable from AEs - AR placed that the interest is charged on outstanding receivable from AEs - assessee itself charged the interest on outstanding @6% to 10% without allowing any credit period - TPO determined interest @13.10%. But the DRP held prime lending rate to be charged - HELD THAT:- The issue is squarely covered by the order of ITAT in assessee‟s own case in [2024 (2) TMI 921 - ITAT MUMBAI] (supra). The average LIBOR rate for the year under consideration submitted by the ld. AR is less than the interest charged by the assessee. Therefore, we cannot circumvent the order of coordinate bench and no further adjustment is required in this regard. Accordingly, the TP adjustment is deleted.
Non-recovery of interest in respect of loan to AEs - AR claimed that the own funds were utilized for interest free loans to the subsidiary - HELD THAT:- We notice that the assessee had granted loan to TATA West Asia FZE (wholly owned subsidiary of the assessee) during the financial year 2008-09 & that no new loan has been granted during the year under consideration.
AE incurred a bad debt due to which its Net Assets fell below 75% of its share capital and hence money was advanced by the appellant to comply with JAFZA rules as quasi equity. Therefore, such loan / advances shall not attract any interest. From the above it is clear that the loan was given for the purpose of business and therefore, in our view, no interest should be disallowed keeping in view the decision of S.A.Builders Ltd [2006 (12) TMI 82 - SUPREME COURT] There is also merit in the submissions of the assessee that even otherwise, the loan was granted from interest free funds i.e. receipts from the maturity of mutual funds. Considering these facts, non-recovery of interest from interest free loan, the addition of interest amount is quashed.
Disallowance of exemption claimed by the assessee u/s 14A -HELD THAT:- From the calculation of capital, the investment was made from assessee‟s own funds. DR in argument asked to implement Finance Bill, 2021 in relation to amendment under section 14A. But in contrary, the Ld.AR relied on the judgement of Ira Infrastructure India Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] Accordingly, this particular amendment is not effective for the impugned appeal. Related to Section 14A we respectfully follow the order of South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] In our considered view, the addition should be restricted to @.5%, only those investments which have yielding income amount to Rs.2255.02 lakhs. DR has not circumvented the offer made by the assessee. Accordingly, the entire addition U/s 14Ais directed to restrict amount to Rs. 11.28 lakhs.
Disallowance of professional fees paid to Deloitte Touche Tohmatsu for market research and survey - HELD THAT:- Assessee company is active in the global export market for leather footwear and manufacturer of leather footwear to major global brands like Hush Puppies, Zara, Marks and Spencer, etc. with annual footwear exports of over Rs. 150 crores. So, the expenses to DHS for exploring local market is well acceptable before the bench.
We respectfully follow the order of Alembic Chemical Works Co. Ltd [1989 (3) TMI 5 - SUPREME COURT] and we follow the order of Asian Paints [2024 (3) TMI 542 - ITAT MUMBAI] DR was unable to place any contrary judgment against the submission of the AR. We set aside the appeal order in this ground.
Professional charges paid - HELD THAT:- The issue is already decided against the assessee and matter is pending before the Hon’ble jurisdictional High Court. Accordingly, we follow the order of our co-ordinate bench, [2024 (2) TMI 921 - ITAT MUMBAI] (supra), and the ground of the assessee is dismissed.
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2024 (5) TMI 1557
Reopening of assessment under old regime - scope of new regime - scope of TOLA - as argued notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute - HELD THAT:- We are informed by counsel for Petitioner/s that these Petitions will be covered by the judgment in Hexaware Technologies Limited. [2024 (5) TMI 302 - BOMBAY HIGH COURT]Counsel for Respondent/s concur.
Therefore, the notices and orders impugned in these petitions are quashed and set aside. In case any re-assessment order is passed, the same also will stand quashed. So also, consequential demand notice or penalty notice will also stand quashed and set aside.
Petitions disposed accordingly. In view of disposal of petitions, interim application, if any, pending therein shall also stand disposed.
Whichever contention raised in the Petition not covered by the Hexaware Technologies (Supra) is kept open to be raised, should the need arise.
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2024 (5) TMI 1556
Scope and applicability of rectification powers u/s 254(2) - Penalty u/s.271(1)(c) - 'concealment of income' or 'furnishing of inaccurate particulars of income' or both - HELD THAT:- Validity of the jurisdiction assumed by the AO for imposing penalty u/s. 271(1)(c) of the Act in absence of striking off the irrelevant default in the body of the show cause notice issued u/s. 274 of the Act, therefore, the view so taken by us, cannot be sought to be reviewed in the garb of an application filed by the revenue u/s. 254(2) of the Act.
As the department had failed to point out as to how the order passed by us while disposing off the captioned appeal suffers from any mistake which is glaring, patent, obvious and apparent from record, therein, rendering the same amenable for rectification under sub-section (2) to Section 254 therefore, the present application filed by it does not merit acceptance.
As the review of an order passed by the Tribunal does not fall within the scope and gamut of the jurisdiction vested u/s. 254(2) of the Act, therefore, we are afraid that the present application filed by the revenue cannot be accepted.
We may herein observe, that as stated by the AR, and rightly so, the revenue in the garb of the present application filed u/s. 254(2) of the Act had, in fact, sought for a review of the order so passed by us while disposing off the appeal which as observed by us hereinabove does not fall within realm of the powers vested with u/s. 254(2) of the Act. Accordingly, the miscellaneous application filed by the revenue u/s.254(2) of the Act is dismissed in terms of our aforesaid observations.
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2024 (5) TMI 1555
Challenge to order u/s 74(9) of the Central Goods and Services Tax Act, 2017 - absence of affording an opportunity of personal hearing to the petitioner - violation of principles of natural justice - HELD THAT:- It transpires from the record, neither the adjudicating authority issued any further notice to the petitioner to show cause or to participate in the oral hearing, nor he granted any opportunity of personal hearing to the petitioner.
In view of the facts noted, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same.
The impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings.
Conclusion - i) The mandatory nature of personal hearing under Section 75(4) of the Central Goods and Services Tax Act, 2017 affirmed, before passing any adverse order. ii) Denial of personal hearing constitutes a violation of natural justice rendering the order void. iii) The remedy of appeal under Section 107 cannot be denied on procedural grounds when fundamental rights are infringed. iv) Self-imposed bars of alternative remedy do not apply where procedural safeguards are ignored.
The matter is remitted to the respondent no.2-Deputy Commissioner, Commercial Tax Department, Sikandrabad, Bulandshahar to pass a fresh order, in accordance with law, after affording due opportunity of hearing to the petitioner - petition disposed off by way of remand.
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2024 (5) TMI 1554
Deduction u/s 80P - interest received from cooperative banks - HELD THAT:- We find the issue now stands decided in favour of the assessee by the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case for assessment years 2010-11 [2017 (5) TMI 1655 - ITAT PUNE], 2011-12 [2016 (7) TMI 1484 - ITAT PUNE], 2012-13 [2018 (1) TMI 1432 - ITAT PUNE] and 2013-14 [2019 (1) TMI 2066 - ITAT PUNE] wherein identical issue has been decided in favour of the assessee and the appeal filed by the Revenue challenging the order of CIT(A) in allowing the claim of deduction u/s 80P of the Act made by the assessee has been dismissed. Appeal filed by the Revenue is dismissed.
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2024 (5) TMI 1553
Validity of Notices u/s 153C - absence of incriminating material specific to those AYs - HELD THAT:- Undisputedly, the issue now stands answered and covered in favour of the writ petitioner bearing in mind the principles that we had enunciated in Saksham Commodities Limited [2024 (4) TMI 461 - DELHI HIGH COURT] mere existence of a power to assess or reassess the six AYs' immediately preceding the AY corresponding to the year of search or the “relevant assessment year” would not justify a sweeping or indiscriminate invocation of Section 153C.
The jurisdictional AO would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income of years or years which may form part of the block of six or ten AYs' and thereafter proceed to place the assessee on notice under Section 153C. The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. It would only be consequent to such satisfaction being reached that a notice would be liable to be issued and thus resulting in the abatement of pending proceedings and reopening of concluded assessments.
Thus we allow the instant writ petitions and quash the impugned notices dated 16 March 2023 issued under Section 153C of the Act and all consequential proceedings arising therefrom.
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2024 (5) TMI 1552
Dismissal of petition on the ground of delay - compliance with an obligation to provide just and fair compensation for the land acquired in 1977 - HELD THAT:- In Tukaram Kana Joshi v. MIDC [2012 (11) TMI 1234 - SUPREME COURT], this Court held that the State must comply with the procedure for acquisition, requisition, or any other permissible statutory mode. The State being a welfare State governed by the rule of law cannot arrogate to itself a status beyond what is provided by the Constitution.
This Court in State of Haryana v. Mukesh Kumar [2011 (9) TMI 1182 - SUPREME COURT] held that the right to property is now considered to be not only a constitutional or statutory right, but also a human right. Human rights have been considered in the realm of individual rights such as right to shelter, livelihood, health, employment, etc. Human rights have gained a multifaceted dimension.
As held by this court in Vidya Devi v. The State of Himachal Pradesh & Ors. [2020 (1) TMI 1691 - SUPREME COURT], delay and laches cannot be raised in a case of a continuing cause of action or if the circumstances shock the judicial conscience of the court. The condition of delay is a matter of judicial discretion, which must be exercised judiciously and reasonably in the facts and circumstances of the case. As held by this Court, it would depend upon the breach of fundamental rights, and the remedy claimed, and when and how the delay arose. There is no period of limitation prescribed for the courts to exercise their constitutional jurisdiction to do substantial justice.
Conclusion - The High Court should have exercised its jurisdiction to promote justice, rather than dismiss the petition on delay grounds.
Appeal allowed.
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2024 (5) TMI 1551
Reopening of assessment u/s 147 - notice issued by the revenue authorities after the expiry of four years - HELD THAT:- Three issues raised by the Revenue Audit Party viz. depreciation, stores written off & bond issue expenses which were claimed as revenue in nature, AO has recorded reasons on the issue of depreciation and stores written off. After recording the reasons, the AO has issued notice u/s 148 on 18.03.2013. The same reasons have been provided to the assessee on 26.11.2013 in response to the request of the assessee.
We observe that the issue of depreciation and written off of stores are already part of the record before the AO while completing the assessment u/s 143(3). The depreciation claimed is available clearly in the depreciation schedule and the writing off of stores is decipherable from the P&L account.
Thus, we find that there was no failure on the part of the assessee to disclose fully and truly all the material facts required for assessment for the year. The audit party has raised objections only after going through the assessment record before them. There was no new information available to the revenue nor there was any default on the assessee to disclose all the required material facts.
Hence, we hereby hold that the notice issued u/s 148 on 18.03.2013 after the expiry of four years from the end of the relevant assessment year, a period of 4 years for the Assessment Year 2006-07 after completion of the assessment u/s 143(3) on 26.11.2007 is invalid and hence the entire assessment is liable to be quashed.
We observe that the notice would have been valid, had it been issued before 31.03.2011 as the proviso to Section 147 are not attracted if the notice is issued before expiry of 4 years. The revenue gladly waited for a period of 5 years for the reasons best known to them to issue notice in the year 2013 after the receipt audit objections u/s 148 in the year 2008. Appeal of the assessee is allowed.
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