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Showing 501 to 520 of 844 Records
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2020 (7) TMI 345
Classification of Supply - transfer (sale) of ongoing business / unit - supply of goods or supply of services or supply of goods services - Research & Development work in Active Pharmaceutical Ingredient (API) & formulation molecules & manufacture of formulation products in small quantity for R & D purpose - SI.No.2 of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 - transfer of unutilized credit - HELD THAT:- In the instant case the activity of the ‘transfer’ is made for a consideration, but neither in the course of the business nor for the furtherance of the business. A going concern is a onetime affair made where the business is sold including assets in entirety or an independent part thereof. Even though this transaction does not amount to a ‘supply’ as per definition, but qualified to be one under the scope of supply as it is backed by the term ‘includes’ in Section 7(1) of the CGST Act, 2017. Thus, in the broadened interpretation of the term ‘includes’, this activity is brought under the scope of supply.
Whether ‘ongoing concern’ is to be treated as ‘supply of goods’ or ‘supply of services’? - HELD THAT:- The definition of services qualifies ‘anything other than goods’ as service. In this context it is obvious that the ‘going concern’, which was excluded form list of ‘supply of goods’ as discussed above, would automatically fall under ‘supply of services’ - Further, the description of services under SI.No.2 of Chapter 99 of Notification No. 12/2017 - Central Tax (Rate) dated 28.6.2017 provides for “Services by way of transfer of a going concern, as a whole or an independent part thereof’ as nil rated. Hence, the transaction is not liable to tax.
Whether the applicant can file GST ITC-02 return and transfer unutilised ITC from Vizianagaram, Andhra Pradesh unit to Bengaluru, Karnataka Unit? - HELD THAT:- In case of sale or transfer, the transferor can transfer unutilised input tax credit to the transferee, which is lying in his electronic credit ledger, by filing Form GST ITC-02.
The transaction would amount to supply of services - the transaction would cover SI.No.2 of the Notification No.12/2017- Central Tax (Rate) dated 28.6.2017 - the unutilised ITC from Vizianagaram, Andhra Pradesh unit to Bengaluru, Karnataka Unit can be transferred by filing GST ITC-02.
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2020 (7) TMI 344
Classification of vessel - rate of IGST - Tug Jupiter, let out under a charter for 730 days (with an option to extend the contract one year more) - Whether classifiable under SAC 996602 or under SAC 997319? - HELD THAT:- Hon’ble Tribunal in the case of SHIPPING CORPORATION OF INDIA LTD. VERSUS COMMR. OF CUS. (IMPORT) , MUMBAI [2013 (7) TMI 881 - CESTAT MUMBAI] categorically, held that they are not machinery, equipment or tools. In an appeal to High Court in the case, the court ratified the same and hence a tug is not a machinery, equipment or tools independently but considered to be a vessel.
Thus, Tug Jupiter let out by the applicant to RIL on charter basis is classifiable under Sl.No.10 of Heading 9966, vide Notification No. 1/2018-IT(Rate) dated 25.01.2018 read with Notification No. 8/2017-IT(Rate) dated 28.06.2017.
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2020 (7) TMI 343
Participation in the proceedings - permission to make copies of the seized documents - HELD THAT:- There is a provision in law as has been placed by Mr. Dugar that “the person from whose custody documents are seized under subsection (2) shall be entitled to make copies thereof.” - There is no ambiguity or illegality or infirmity in the impugned order. However, we direct the appellant/petitioner to take steps in terms of Section 67 subsection 5 under Chapter XIV of the Central Goods and Services Tax Act, 2017, if he is so advised. If the appellant/petitioner takes steps as per said subsection 5 of Section 67 under Chapter XIV of the Central Goods and Services Tax Act, 2017, then the respondent no. 3 is directed to allow the appellant/petitioner to make copies of the seized documents by 13th July, 2020 subject to compliance of statutory formalities.
The appellant /petitioner is directed to give written reply to the show cause notice by 20th July, 2020.
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2020 (7) TMI 342
Grant of Bail - Input Tax Credit - fake bills - allegation against the petitioner who is a Chartered Accountant is of making fake firms who later on claimed input tax credit - HELD THAT:- It is deemed proper to allow the bail application.
This bail application is, accordingly, allowed and it is directed that accused-petitioner shall be released on bail provided he furnishes a personal bond in the sum of ₹ 1,00,000/- together with two sureties in the sum of ₹ 50,000/- each to the satisfaction of the trial Court with the stipulation that he shall appear before that Court and any Court to which the matter be transferred, on all subsequent dates of hearing and as and when called upon to do so.
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2020 (7) TMI 341
Grant of Bail - offence under Section 132(1) 1 Central Goods & Service Tax Act, 2017, P.S. Commissionerate, District Meerut - HELD THAT:- Learned A.G.A. could not dispute the fact that the co-accused has already been released on bail on his furnishing a personal bond.
The applicants-Mohd. Shamshad and Sajjad are directed to be released on bail, under Section 132(1)1 Central Goods and Services Tax Act, 2017, P.S.- Commissionerate, District- Meerut on their furnishing a personal bond only to the satisfaction of the jail authorities, where the applicants are languishing - Application disposed off.
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2020 (7) TMI 340
Profiteering - restaurant services - allegation that benefit of reduction in GST rate not passed on by way of commensurate reduction in prices - contravention of section 171 of CGST Act - penalty - HELD THAT:- The profiteered amount is determined as ₹ 41,93,431/- as has been computed in Annexure-14 of DGAP's Report dated 27.12.2019 - Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133(3)(a) of the above rules - Further, since the recipients of the benefit, as determined, are not identifiable, the respondent is directed to deposit an amount of ₹ 41, 93,431/- in two equal parts of ₹ 20,96,715.50 each in the Central Consumer Welfare Fund and the Maharashtra State Consumer Welfare Fund as per the provisions of Rule 133(3)(c) of the CGST Rules, 2017 alongwith interest payable @ 18% to be calculated from the respondent from his recipients till the date of its deposit. The above amount of ₹ 41, 93, 431/- shall be deposited, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioners.
Penalty - HELD THAT:- The respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of section 171(1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore he is loable to penal action under the provisions of the section - accordingly, a notice be issued to him directing him to explain why the penalty prescribed under section 171 (3A) of the Act read with Rule 133 (3) (d) of CGST Rules, 2017 should not be imposed on him.
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2020 (7) TMI 339
Disallowance u/s 14A - procedure to be followed by AO under Section 14A - as per tribunal Assessing Officer is not justified in making excessive disallowance and that the CIT(A) rightly restricted the disallowance to the extent the dividend income declared by the assessee - HELD THAT:- AO must, in the first instance, determine whether the claim of the assessee in that regard is correct and the determination must be made having regard to the accounts of the assessee. The satisfaction of the AO must be arrived at on an objective basis. It is only when the AO is not satisfied with the claim of the assessee, that the legislature directs him to follow the method that may be prescribed. Sub-s. (3) of s. 14A provides for the application of sub-s. (2) also to a situation where the assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under the Act. See GODREJ AND BOYCE MFG. CO. LTD [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided in favour of assessee.
Income derived from letting out of property to the tenants - Property in an industrial park/SEZ including the amenities - income from other sources or business income or income from house property - HELD THAT:- We need not labour much on this issue, on account of the circular No.16 of 2017 issued by the CBDT dated 25.04.2017. The CBDT after taking note of the two decisions of the Karnataka High Court held that it is now a settled position that in the case of an undertaking which develops, develops and operates or maintains and operates an industrial park/SEZ notified in accordance with the scheme framed and notified by the Government, the income from letting out the premises / developed space along with other facilities in an industrial park/SEZ is to be charged to tax under the head 'Profits and Gains of Business'.
As rightly pointed out by Mr.R.Vijaya Raghavan, the emphasis is on not only letting out of the premises / developed space but along with other facilities in an industrial park/SEZ. The tribunal in this regard followed a decision of the Division Bench of this Court in the case of CIT Vs. Elnet Technologies Limited [2012 (11) TMI 671 - MADRAS HIGH COURT] - Decided in favour of assessee.
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2020 (7) TMI 338
Disallowance u/s 14A - whether the tribunal was right in coming to the conclusion that the Assessing Officer has not recorded his mandatory satisfaction as required u/s 14A(2)? - HELD THAT:- AO after going through the submission made by the petitioner pointed out that the assessee had computed the disallowance of dividend by invoking the provisions of Rule 8D, but while doing so, ignored sub rule iii of the said rule. It appears that this was pointed out to the assessee. Assessee though filed a response on 09.01.2014, the Assessing Officer states that the assessee did not address the issue of computation of the third limb of Rule 8D.
The finding recorded by the AO is sufficient and a clear indication of his compliance of the procedure under Section 14A(2), the AO at the first instance has considered whether the claim of the assessee is correct and thereafter only has proceeded to determine the amount by adopting the procedure under Rule 8D.
For assessment year 2011-12 - it cannot be stated to be the case where there is a failure to follow the procedure under Section 14A (2)
So far as the order passed for the assessment year 2012-13 on a closer reading of impugned order, we find that though the tribunal directs the assessee to work out the expenditure component towards administrative and managerial aspect so that the same shall be disallowed in the computation of income, but has not issued any specific directions to the AO as to what has to be done after the assessee files the working sheet. Therefore, to that extent the tribunal has committed an error. Hence, we are of the considered view that the matter should be remanded for fresh consideration of the Assessing Officer in accordance with law. - Decided in favour of revenue.
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2020 (7) TMI 337
Stay petition - Lockdown due to Covid-19 Pandemic - prayer for interim stay and appropriate direction issued to the appellate authority for the disposal of interim application along with the appeal within a reasonable period after lock down is over subject to deposit of the 20% of the demanded amount which is not phenomenal - HELD THAT:- This writ petition can be disposed of, with a direction to the 2nd respondent to take a call on application of stay within two months from the date of receipt of a copy of this judgment after affording an opportunity of hearing to the petitioner and pass a speaking and reasoned order. However, till such time, the revenue recovery proceedings based on Ext.P4 shall be kept in abeyance, subject to the condition that the petitioner deposits 10% of the demand raised within a period of one month.
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2020 (7) TMI 336
Penalty u/s 271(1)(c) - Assessment u/ 153A - addition towards bogus long term capital gain and addition towards unexplained cash expenditure - HELD THAT:- No penalty under Explanation-5 to Section 271(1)(c) of the Act could be levied in respect of undisclosed income found in the course of search but which were duly returned by the assessee in the return filed u/s.153A of the Act together with compliance of other conditions submitted in Clause-2 of Explanation-5 to Section 271(1)(c) of the Act which provides immunity to the assessee from levy of penalty. By this, the penalty levied for all the assessment years in the total sum is deleted.
In respect of penalty on additions made during the course of assessments framed u/s.153A of the Act for three assessment years i.e. A.Yrs 2001-02, 2003-04 and 2007-08, we hold that the same is deleted for recording improper satisfaction on the part of the ld. AO by not mentioning the specific offence committed by the assessee in the quantum assessment order and also for initiating penalty on one limb and levying penalty on the other limb of the alleged offence. By this, the penalty levied for three assessment years is deleted. - Decided in favour of assessee.
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2020 (7) TMI 335
Disallowance u/s.40(a)(ia) - Scope of second proviso of Section 40(a)(ia) r.w.s. 201(1) as amended - exhibition expenses paid to Idea House Pvt. Ltd. without deduction of tax at source - HELD THAT:- The said amendment has been held to be retrospective in operation in the case of CIT vs. Ansal Landmark Housing Development Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT]. We find that the decision in the case of Thomas George Muthoot vs. CIT [2015 (7) TMI 810 - KERALA HIGH COURT] is against the assessee on the very same issue wherein the second proviso to Section 40(a)(ia) r.w.s. 201(1) of the Act had been held to be prospective in operation.
We could find that there are divergent views taken by different non-jurisdictional High Courts. In such a scenario, the Hon’ble Supreme Court in the case of Vegetable Products [1973 (1) TMI 1 - SUPREME COURT] had held that the construction that is favourable to the assessee should have to be considered. Accordingly, we would like to place reliance on the decision of the Hon’ble Delhi High Court referred to supra and hold that assessee herein being a payer cannot be treated as an assessee in default and consequently, no disallowance u/s.40(a)(ia) of the Act could be made in the hands of the assessee herein. - Decided in favour of assessee.
TDS u/s 194C - Disallowance u/s.40(a)(ia) - advertisement expenses incurred without deduction of tax at source - HELD THAT:- There is absolutely no dispute that the said payment was made towards advertisement charges to Harsha Agencies which is a franchisee of ‘The Hindu’. On bare reading of provisions of Section 194C of the Act, we find that any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract shall deduct tax at source thereon. Explanation to Section 194C of the Act defines the term ‘work’ to include ‘advertising’. Hence, the very fact that assessee had given the advertisement material to M/s. Harsha Agencies, constitutes a contract entered into by assessee and Harsha Agencies - all the ingredients of Section 194C of the Act get squarely attracted in the instant case - assessee is indeed liable for deduction of tax at source on the said payment -AO is justified in making disallowance u/s.40(a)(ia) - Decided against assessee.
Disallowance of transport expenses u/s.40(a)(ia) on non-deduction of tax at source - HELD THAT:- Assessee submitted that since PAN was obtained from the respective transporters to whom payments were made, pursuant to the amendment brought in the provisions of Section 194C of the Act w.e.f. 01/10/2009, there was no requirement for the assessee payer to deduct tax at source once PAN is obtained. AO however, ignored the contentions of the assessee and observed that the said payment would attract provisions of Section 194C and proceeded to make disallowance u/s.40(a)(ia) in the assessment - before the ld. CIT(A), the assessee had indeed made a submission that the respective transporters had included these sums in their returns and hence, the assessee should not be invited with disallowance u/s.40(a)(ia) of the Act in terms of second proviso to Section 40(a)(ia) r.w.s. 201(1) .
CIT(A) had not discussed on this particular submission of the assessee at all and had not given any finding in its appellate order regarding the same. We find that this is a statutory benefit provided to the assessee which should not be taken away.
Even before us, we find that the ld.AR except making oral statement that the payees have included the said receipts in their income tax returns, had not produced any documentary evidence before us. However, in order to avoid double taxation, we deem it fit and appropriate, in the interest of justice and fair play, to remand this issue to the file of the ld. AO for the limited purpose of verification of the income tax returns for the Asst Year 2010-11 of the respective payees in the light of the second proviso of Section 40(a) (ia) r.w.s. 201(1) - as already held that second proviso has already been held to be retrospective in operation - if the payees have included the subject mentioned transaction in their income tax returns, then the assessee payer should not be treated as assessee in default and disallowance u/s.40(a)(ia) of the Act should be deleted in its hands - Decided in favour of assessee for statistical purposes.
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2020 (7) TMI 334
Addition u/s 68 or 69A - assessee failed to prove the source of income in the hands of the persons who gave DD in favour of the Excise Commissioner on behalf of the assessee - no pan numbers were given in their confirmation letters - HELD THAT:- If we go through the observations of the Tribunal, it is very clear that the Tribunal has concluded the issue of applicability of provisions of sec.68 or 69A of the Act, without allowing further scope to challenge the issue. Therefore, we are of the considered view that, there is no merit in the arguments of the ld. AR of the assessee that the provisions of sec.68 or 69A of the Act has no application to the impugned amounts.
As regards the additions made towards the DDs taken from certain parties, on perusal of confirmation letters filed by the assessee before the AO, the copies of which are made available to us in paper book, we find M/s Sangameshwara Enterprises from whom a sum of ₹ 5.00 lakh has been taken by the assessee was confirmed that they have issued DD in favour of the assessee and said DD has been taken from M/s Vysya Bank, Bidar Branch. We further noted that M/s Sangameshwara Enterprises is also assessed to income tax at Gulbarga. Therefore, we are of the considered view that, no additions could be made in respect of DD taken from M/s Sangameshwara Enterprises. As regards amount received from Sheri. Negara, although the assessee has filed confirmation letter along with affidavit from the person who gave the DD, but fact remains that the details of pan numbers and income tax assessment of Shri Nagaraj has not been furnished so as to ascertain whether Shri Nagaraj is having sufficient source of income to explain the DD issued on behalf of assessee. From the above, it is clear that addition made towards DD taken from Shri. Nagaraj to the extent of ₹ 5.00 lakhs remains unexplained. There is no error in the findings recorded by the AO as well as the ld.CIT (A) to confirm the addition.
Addition made for DD received from Shri V.B.Manik Rao - As explained in the light of the findings of the Tribunal Therefore, we are of the considered opinion that once the assessee has given the details of income tax assessment of person who gave the DD, merely for the reason that pan number is not furnished, no addition could be made. Hence, we direct the AO to delete the addition made towards DD taken in the name of Shri V.B.Manik Rao. Out of additions sustained by the ld. CIT (A) of ₹ 22.00 lakhs, the assessee gets a relief to the extent of ₹ 15.00 lakhs towards Demand Drafts received from M/s Sangameshwaran Enterprises, Shri N.R.Veerappa and Shri V.B,Manik Rao. The balance amount of ₹ 7.00 lakhs being amount received from Shri Nagaraj and Shri U.G.Rohit is still unexplained and hence, we confirm the additions made by the AO towards Demand Drafts claimed to have received from above two parties. Appeal filed by the assessee is partly allowed.
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2020 (7) TMI 333
Disallowance u/s 14A read with Rule 8D - HELD THAT:- Assessee has received dividend income of ₹ 1,80,717/- only. The Hon’ble Delhi High Court in the case of Joint Investment Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] held that “the disallowance u/s 14A cannot be more than to that of the exempt income.” Since in the present case the dividend income earned by assessee is of ₹ 1,80,717/- which is claimed exempt under section 10(34) therefore, disallowance under section 14A read with Rule 8D should not exceed the exempt income. We, therefore, set aside the Orders of the authorities below and restrict the addition.
Addition on account of loss in trading of stock option - AO confronted the Order of the SEBI to the assessee in which it was alleged that assessee had made losses in indulging in suspicious trades including reversal trades - HELD THAT:- In the present case, the A.O. / Ld. CIT(A) have not gone into the facts and material evidence on record and merely referring to the interim order of the SEBI and subsequent order have decided the issue against the assessee. Since in the case of Rakhi Trading Pvt. Ltd. [2018 (2) TMI 580 - SUPREME COURT] the issue under Income Tax Act was also not adjudicated upon, therefore, in our humble opinion the decision in the case of Rakhi Trading Pvt. Ltd., (supra), would not support the case of Revenue.
In the absence of any investigation carried-out by the authorities below, we are of the view that assessee has been able to establish that assessee company has suffered genuine business loss as had also been suffered in earlier years, therefore, authorities below should not have disallowed the same against the assessee. In view of the above findings, we set aside the Orders of the authorities below and delete the entire addition. In the result, Ground No.1 of the appeal of Assessee is allowed.
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2020 (7) TMI 332
Income from sale of land - Income from business OR capital gain - object of the assessee to purchase the land to convert into small plots and then sale these small plots on profit - AO and CIT-A held that since the assessee’s main business is to do liasoning work in the real estate property and therefore assessee is not a business man in property - HELD THAT:- Presumption of the Assessing Officer that since the assessee does liasoning work in the real estate transaction therefore he cannot do the business, is not tenable. We note that the business is defined u/s 2(13) - Business as contemplated by section 28 of the Act, is an activity capable of earning of profit which can be taxed. One of the ingredients of “business” is that it must be carried on with profit motive. However, while doing the business, the loss may also be incurred but the person who starts the business has always a profit motive.
We note that Hon’ble Supreme Court in the case of Mercantile Corporation Pvt. Ltd. [1972 (1) TMI 2 - SUPREME COURT] held that the company dealing in real estate can be said to carry on business which develops a market- place, and lease out shops, sales plots. We note that in the assessee’s case under consideration, the assessee is fulfilling the condition of section 28 of the Act, being a business, therefore, we direct the Assessing Officer to treat the transaction under the head income from business and compute the tax liability accordingly. The assessee is directed to submit necessary details to compute income from business from such transaction.
Addition made on account of opening capital balance - assessee submitted before the Assessing Officer that the opening capital balance represents the capital which has been accumulated over years as per the returns of income filed with the Income tax Department - HELD THAT:- As assessee contends before us that in the income tax return there was no any requirement to file the figure of the proprietor’s capital account and in fact there was no column in the income tax return to show the proprietor’s capital account therefore, in the income tax return, the figure of ₹ 34,80,000/- is not getting reflected, this issue needs to be remitted back to the file of AO to examine afresh the balance sheets of the assessee vis-à-vis income tax returns filed by the assessee. We direct the Assessing Officer to examine the income tax returns and the copy of the balance sheet and profit and loss account of the assessee and adjudicate this issue in accordance with law. For statistical purposes this ground is treated to be allowed.
Unexplained cash credit - HELD THAT:- We note that before us the assessee submitted the SBI saving bank account details wherein we noticed that the respective amount have been deposited by way of account payee cheque and it is not a cash deposit, as wrongly admitted by the assessee during the assessment stage.
The purpose of taxation law is to tax the right income in the hands of the right person and in the right assessment year. Therefore, we remit this issue back to the file of the Assessing Officer to examine the bank statement and adjudicate the issue in accordance with law. The assessee is directed to file the copy of bank statement of A/c of SBI saving bank account. For statistical purposes, the third issue is treated to be allowed.
Penalty u/s 271(1) (c) - HELD THAT:- Since we have adjudicated the appeal of the assessee on merits and deleted some additions and we also remitted some issues back to the file of Assessing Officer to adjudicate these issues afresh. Since the quantum has been deleted by us therefore the penalty should not survive. That is, since we have deleted the additions/ issues remitted back to the file of the AO for fresh adjudication therefore penalty u/s 271(1) (c) does not survive hence we cancel the penalty U/s 271(1) (c).
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2020 (7) TMI 331
Revision u/s 263 - assessment order passed by the assessing officer under section 153A/ 143(3) - HELD THAT:- It is a settled position in law that provisions of sec. 263 of the Act do not permit substituting one opinion by another opinion. Therefore, the order of the Ld. Pr. C.I.T. cannot be sustained on the principle of ‘erroneous’ nature of the order of the A.O., as it is not erroneous. Further, in the instant case, to reiterate, there was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an order cannot be called erroneous and prejudicial to interests of revenue only because the A.O. made the assessment without discussing such details therein, as held in the case of Chroma Business Ltd. vs. DCIT [2003 (10) TMI 256 - ITAT CALCUTTA-C].
Revisionary jurisdiction exercised by the Ld. Pr. C.I.T. u/s. 263 of the Act was not in tune with the facts and evidences on record duly explained to the Ld. A.O. and verified by him in original assessment order u/s 153A / 143(3) dated 28.12.2016 and second assessment order u/s 143(3) r.w.s 263 of the Act dated 31.12.2018 and that being so the order passed u/s. 263 of the Act on such erroneous stand is liable to be quashed. Therefore, based on these facts and precedents narrated above, we quash the second 263 order of ld. PCIT. - Appeal filed by the assessee is allowed.
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2020 (7) TMI 330
Addition 36(1)(va) read with Section 2(24)(x) - delayed PF and ESI payments - payments of employees contribution by the Assessee towards provident fund and Employees State Insurance which are not deposited on or before the due date to the respective organizations but which are deposited before the due date for filing return of income u/s.139(1) - HELD THAT:- The Hon’ble Karnataka High Court in the case of CIT Vs. Sabari Enterprises [2007 (7) TMI 169 - KARNATAKA HIGH COURT]has taken the view that contributions made by the Assessee to PF and ESI are allowable deductions even though made beyond stipulated period as contemplated under the mandatory provisions off Sec.36(1)(va) read with Section 2(24)(x) of the Act provided such contributions are paid by the Assessee on or before the due date for furnishing the return of income as per Sec.139(1) of the Act. Decided in favour of assessee.
Determination of arm's length price (ALP) in respect of international transaction of rendering software development services by the assessee to its Associated Enterprise (AE) u/s. 92 - Comparable selection - HELD THAT:- Referring to software development services provided by the assessee we are of the view that Persistent Systems Ltd. should be excluded from the list of comparable companies as into software products and software solutions and no segmental details were available and therefore the profit margin in the software development services segment could not be compared with the assessee's profit margin.
RPT filter applied by the TPO - Related Party Transaction - As far as Tech Mahindra Ltd. is concerned, the learned counsel made a prayer that the related party transaction (RPT) of this company was more than 25% - it would be just and proper to set aside the order of DRP on this issue and remand the issue to AO/TPO for consideration of the contention of the assessee with regard to the exclusion of this company by application of RPT filter.
Adjustment on account of working capital at 5.23% - In keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the Assessee should be allowed. We hold and direct accordingly.
Exclusion of Larsen & Toubro Infotech Ltd., is not considered because this company was chosen by the Assessee as a comparable company in its TP study.
Though the Assessee is entitled to challenge the inclusion even though it was chosen by the Assessee as comparable company, in the present case we do not wish to go into this question for the reason that by reason of the relief allowed to the Assessee the profit margin of the Assessee after working capital adjustment would be within ALP. Similarly, inclusion of ICRA techno Analytics Ltd., and Mindteck (I) Ltd., is not considered because by reason of the relief allowed to the Assessee the profit margin of the Assessee after working capital adjustment would be within ALP.
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2020 (7) TMI 329
Validity u/s 143(3) r.w.s 144C(3) - scheme of merger conceived - Entity non-existent on the date on which the assessment order was passed - HELD THAT:- Assessee viz. Satyam Computers Services Ltd. w.e.f 1-4-2011 merged with M/s Tech Mahindra Ltd. After the said merger, all the proceedings against Satyam Computer Services Ltd. were taken over by Tech Mahindra Ltd.
Assessment order passed by the A.O u/s 143(3) r.w.s 144C(3), dated 25-5-2015 in the hands of M/s Satyam Computers Services ltd., i.e an entity that was non-existent on the date on which the assessment order was passed, the same would thus be non-est in the eyes of law.
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2020 (7) TMI 328
Unexplained investment u/s 69 - Explanation to source of investment - HELD THAT:- A perusal of the order of the first appellate authority does not reveal that any notice of enhancement was issued to the assessee and prior to such notice it is not known whether the CIT(A) has asked the assessee to explain the source of investment. Though there is a passing reference that the assessee was required to explain the source of investment but evidences filed by the assessee have been simply rubbished by the ld. CIT(A).
CIT(A) ought to have asked the assessee to explain the source of investment and if not satisfied, then should have issued notice of enhancement. Since the Assessing Officer had no opportunity to examine the evidences, we deem it fit to restore the entire issues to the file of the CIT(A). CIT(A) is directed to examine the evidences relating to the source of investment and after satisfying himself, should proceed further keeping in mind that the AO has not made any addition u/s 69 as relying on SARDARI LAL & CO [2001 (9) TMI 1130 - DELHI HIGH COURT] and SHRI. B.P. SHERAFUDIN [2017 (11) TMI 128 - KERALA HIGH COURT] - Appeal of the assessee is treated as allowed for statistical purposes.
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2020 (7) TMI 327
Long-term capital gain - FMV determination - HELD THAT:- Fair market value of the property as on 01.04.1981 was claimed by the assessee on the basis of actual sale instance of the comparable property but the same was not accepted by the AO, who adopted the fair market value of the property as on 01.04.1981 on the basis of the valuation made by the Departmental Valuation Officer (DVO). He has contended that the copy of the DVO’s valuation report, however, was never given by the AO to the assessee and even the objections raised by the assessee in respect of the valuation determined by the DVO before the ld. CIT(Appeals) were not properly considered by him.
As contended that even the sale instances relied upon by the assessee to justify the fair market value of the property as on 01.04.1981 taken by him were not properly appreciated either by the Assessing Officer or by the ld. CIT(Appeals) - a similar issue involved in the case of co-owner Shri Samaresh Kumar Mondal, brother of the assessee, has already been sent back by the Tribunal to the Assessing Officer for reconsideration - A perusal of the order of the Tribunal passed in the case of Samaresh Kumar Mondal, however, shows that a similar issue involved in the said case in the identical facts and circumstances was remitted by the Tribunal back to the ld. CIT(Appeals) for fresh adjudication - Appeal of the assessee is treated as allowed for statistical purposes.
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2020 (7) TMI 326
Valuation of imported goods - Provisional release of goods - Plain White Papers in Rolls - enhancement of value without any basis - HELD THAT:- Though the DRI has seized the goods for the reason that goods were undervalued but no documentary evidence shows that from where the value was adopted as against the value declared by the appellant. Since the case is under investigation, we do not want to comment whether enhancement of value is legal or illegal. However, considering the various judgments and facts of the present case, we find that terms of bank guarantee fixed by learned Principal Commissioner at ₹ 1.6 Crore is very excessive as against the total differential duty involved ₹ 59 Lakh approx. - the goods were seized on the basis of prima facie nature of the case of undervaluation and detailed investigation is yet to be carried out.
Terms and condition of bank guarantee - HELD THAT:- There cannot be a fixed criteria for the amount of security to be given along with bond for provisional release of goods and it varies from facts of each case. Therefore, considering the overall facts and circumstances of the present case, we are of the view that ends of justice will be met if the appellant execute bond of 100% value of the goods and bank guarantee for 100% of differential duty amount.
Appeal allowed.
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