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Showing 261 to 280 of 16027 Records

• 2014 (12) TMI 1177
  

  Refund - unjust enrichment - During pendency of the appeal before the Tribunal, the appellant had deposited the Central Excise duty under protest - The appellant was all along contesting the issue of leviability of Central Excise duty on the cost of secondary packing with the Central Excise department. - Held that:- The duty paid on the secondary packing has been accounted for by the appellant under the heading “Loans and Advances” in the Balance Sheet as receivable from the Central Excise department. M/s. Damle Dhandhania & Co., Chartered Accountants, upon verification of the Books of Accounts maintained by the appellant, in their certificate dated 14-8-2009 has also endorsed the said fact.

  As held by Hon’ble Rajasthan High Court in the case of UOI v. A.K. Spintex [2008 (11) TMI 89 - RAJASTHAN HIGH COURT] the presumption under Section 12B is a rebuttable presumption and once the assessee produces evidence in support of his claim of having not passed on the incidence of duty whose refund is claimed, to the customers, the burden of proof would shift to the Department to prove that the claim of the assessee is false - Refund allowed.

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• 2014 (12) TMI 1176
  

  Cenvat Credit - Removal of inputs as such on estimation basis - difference between the consumption of aluminium wire rods calculated by the departmental officers based on the approximate mass per K.M. of various types of aluminium alloys standard conductors given in the ISI standard and the consumption of aluminium wire rod as recorded by the appellant company in their central excise records. - Held that:- If the total consumption during the period of dispute is seen, the consumption as per the appellant’s records would be less than the maximum possible consumption as per the ISI standard. Therefore, merely on the basis of the approximate weight of wire in terms of KG per KM for different types of aluminium conductors given in the ISI standard, the allegation of clandestine removal of modvat credit availed aluminium wire rods cannot be made. We are supported in this view by Apex Court judgment in the case of Oudh Sugar Mills [1962 (3) TMI 75 - SUPREME COURT OF INDIA] wherein, Apex Court has held that allegation of duty evasion by clandestine removal based only on the calculation of the raw material fed into the process or on the working of the machinery as noticed during test inspection is not sustainable, when there is no tangible evidence in support of such an allegation.

  In view of this the impugned order confirming the modvat credit demand of ₹ 91,57,546/- against the appellant company alongwith interest thereon and imposing penalty of equal amount under Section 11AC is not sustainable and the same is set aside. - Decided in favor of assessee.

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• 2014 (12) TMI 1175
  

  Taxability for amount received from partnership firm on retirement, as per mutual agreement - treaed as capital gains chargeable to tax - Held that:- Hon’ble Gujarat High Court in CIT vs. Mohan Bhai Pama Bhai (1971 (9) TMI 56 - GUJARAT High Court) held that no transfer is involved when a retiring partner receives at the time of retirement from the firm, his share in the partnership asset either in cash or any other asset. The ratio laid down in P.H. Patel (1987 (8) TMI 40 - ANDHRA PRADESH High Court ) wherein it was held that when a partner retires from a partnership taking his share of partnership interest, there is no element of transfer of interest in the partnership asset by the retiring partner. Therefore, considering the totality of facts and the circumstances by applying the ratio laid down by Hon’ble jurisdictional High Court in the case of Riyaz A. Shekh [2013 (12) TMI 248 - BOMBAY HIGH COURT] wherein held Amounts received on retirement by a partner is not subject to capital gains tax - Decided against Revenue

  Deduction u/s 54 - Held that:- As there is uncontroverted finding in the impugned order that all the payments to the contractors were by cheque only, thus as per the provisions of section 54(2) of the Act, the assessee was to invest the capital gains as per the provision of the Act, we find no infirmity in granting deduction u/s 54 to the extent mention in the order thus we find no substance in the appeal of the Revenue. - Decided against Revenue

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• 2014 (12) TMI 1174
  

  Revision u/s 263 - as per CIT(A) the amount has been split into two parts so as to avoid the attraction of provisions section 40A(3) - Held that:- The copies of the ledger account of the Lorries demonstrate that the payment in question has been made in different points of time. The advance has been paid to the lorry at the first instance and, thereafter when the delivery of the goods has been made, the balance amount has been paid. This fact is reflected by way of passing of journal entries, wherein, the lorries have been credited with the balance payable on the day of payment of advance and it was on subsequent date that the balance has been paid after deducting TDS. This journal entry has not been properly understood by the ld CIT. This is clear from the show-cause notice, where it states that the amount has been split into two parts so as to avoid the attraction of provisions section 40A(3). This is factually incorrect. After the assessee has demonstrated before the ld CIT that the manner in which the entries in the books have been passed, he at page 5 acknowledged that the amounts were split into two parts and one was taken as advance and was given to lorry owners and the balance was paid subsequently by way of cash. This means the ld CIT admits after enquiry that the version of the assessee is correct. While so, we don’t find any justification in the ld CIT directing the AO to verify the details filed by the assessee and determined whether they are factually correct. When the enquiries conducted by the ld CIT have not thrown up any material to demonstrate that the order of the AO was erroneous and prejudicial to the interests of the revenue, the ld CIT should have dropped the proceeding u/s.263.The Ld CIT also cannot without himself conducting enquiries and coming to a conclusion on the basis of material found as a result of enquiry, give direction to the AO to conduct fresh verification. The assessee has satisfactorily explained the issues raised by the ld CIT and in such circumstances, it cannot be said that the order of the AO is erroneous or prejudicial to the interest of the revenue. - Decided in favour of assessee.

  Deduction u/s.80C - Held that:- Coming to deduction u/s.80C of the Act, it is not the case of the ld CIT that the AO has not verified the claim of the assessee. In fact, the assessee has submitted the details to the ld CIT and ld CIT, on examination of such details, has not recorded any adverse conclusion. A simple direction is given to AO to verify the claim of the assessee. Such a direction is erroneous for the reason that the ld CIT has not recorded that any prejudice is caused to the revenue.- Decided in favour of assessee.

  Insurance commission - tds u/s 194C or 194D - Held that:- On the issue of alleged insurance commission earned by the assessee, M/s. Bhaskar Prakashan Pvt. Ltd. has clearly explained that a mistake has occurred while mentioning the section 194D instead of 194C and the commission was never received by the assessee. Despite of such categorical confirmation, the ld CIT directed the AO to verify this claim of the assessee without recording a finding that the order of the AO on this issue is either erroneous or prejudicial to the interests of the revenue. In our view, when proper material has been furnished before the ld CIT and the ld CIT has examined the same, he cannot without recording specific finding that the order is erroneous and prejudicial to the interests of the revenue on certain specific aspects invoked his power u/s.263 - Decided in favour of assessee.

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• 2014 (12) TMI 1173
  

  Death of deceased due to ragging - Proper investigation by CBI - Held that:- Circumstances leading to the death of young college student girl have become the subject matter of investigation. The issue is sensitive not only because of loss of an invaluable human life but also because of the reasons which are sought to be attributed for the sordid affair. The circumstances which the Petitioner has referred to in the writ petition and the written submissions as also the contentions that were urged before us in the course of the hearing may or may not be conclusive in their import but those circumstances need to be suitably looked into by an independent investigating agency like the CBI lest an incomplete, indifferent or ineffective investigation leads to failure of justice.

  On lodging of the complaint by the Petitioner on 9.9.2011, police have registered the case in F.I.R. No. 463/2011 Under Section 306 of the Indian Penal Code at Police Station Bagru, Jaipur. The State police recorded the statement of the sister of deceased, other classmates, principal of the college, chief warden, warden and other staff, doctors and all the concerned persons. Based upon the statement of witnesses, medical report and other materials, the investigating officer found that it is a case of suicide and filed the final report. I am refraining from entering upon the details thereof, lest, it may prejudice any party. Upon consideration of the materials, in my view, proper investigation has been conducted. - HAVING regard to the materials on record, in my considered view, the case in hand is not such an exceptional situation warranting special investigation by the CBI. - Appeal disposed of.

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• 2014 (12) TMI 1172
  

  Reduction of operating profits of the tax-payer being the income from settlement of patent infringement suit credited to Profit & Loss Account - Held that:- As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to assessment year 2008-09, we respectfully follow the decision of the Tribunal for assessment year 2008-09 and uphold the impugned order of the Assessing Officer, whereby he reduced the operating profit of the assessee being the income from the settlement of patent infringement suit to held incomes of extraordinary nature are to be excluded and further extraordinary events in any company also make it non-comparable while doing exercise of FAR analysis for comparability purpose. For the reasons stated above, we agree with the Assessing Officer/DRP that this income from settlement of patent infringement cannot be considered as operational income while working out the segmental profits or as total profits of the assessee for the purpose of comparison. At best, it can be considered as another segment of income for which no expenditure was charged, but the same cannot be included in either of the segmental operations of the assessee. - Decided against assessee

  Claim for weighted deduction under S.35(2AB) in respect of expenditure incurred for registering patents outside India - Held that:- When the learned counsel for the assessee was required by the Bench to clarify as to how the claim of the assessee is covered by the above Explanation, he has contended that the expenditure in question is incurred by the assessee for filing application for patent rights under patents Act, 1970. He has also submitted that the assessee is in a position to support and substantiate its claim by filing relevant documentary evidence and has urged that an opportunity may be given to the assessee for this purpose by sending the matter to the Assessing Officer. Since the learned Departmental Representative has not raised any objection in this regard, we restore this issue to the file of the Assessing Officer with a direction to examine the assessee’s claim for weighted deduction under S.35(2AB) in respect of expenditure incurred for registering patents outside India - Decided in favour of assessee for statistical purposes

  Claim of the assessee for deduction under S.35(1)(i) and (iv) at 100% of expenditure in respect of amount not considered by the prescribed authority under S.35(2AB) for weighted deduction is squarely covered in favour of the assessee by the order of the Tribunal in assessee’s own case for assessment year 2008-09 wherein held that we do not see any reason in not allowing this amount. We are of the opinion that both Assessing Officer and DRP has not applied their mind to the amounts involved. Since the entire claim of the assessee was rejected summarily without examining the facts, we are of the opinion that this expenditure in respect of R & D expenditure is to be considered under section 35(1), if not for the weighted deduction under section 35(2AB). - Decided in favour of assessee

  Deduction under S.10B in respect of export oriented undertaking situated at Jeedimetla - Held that:- A perusal of the relevant portion of the DRP’s order reproduced above shows that a direction has been given by the DRP to the Assessing Officer to follow the judgment of the Hon’ble Andhra Pradesh High Court in assessee’s own case for assessment year 2005-06 as and when it is received on the issue of assessee’s claim for deduction under S.10B. It is observed that a similar direction was given by the DRP in assessee’s own case for assessment year 2008-09 and the same was upheld by the Tribunal vide its order dated 16.1.2014 cited supra, thereby allowing the relevant ground of the assessee’s appeal on this issue for statistical purposes. Respectfully following the decision of the Tribunal on similar issue in assessee’s own case for assessment year 2008-09 - Decided in favour of assessee for statistical purposes.

  Quantification of the deduction under S.10B, by reducing the benefit under S.10B for Unit 3.2 situated at Jeedimetla, is squarely covered in favour of the assessee by the order of the Tribunal dated 16.1.2014 in assessee’s own case for assessment year 2008-09 cited supra, wherein a similar issue was considered and decided that assessee has allocated the corporate overheads on a rational basis based on the material cost of purchase and number of people worked for the unit and also on the basis of head account which is reasonable. Adopting sales turnover as the basis may result in skewed allocation. since Assessing Officer has not given any rationale in adopting the turnover as the basis, ignoring the assessee's method, we are of the opinion that allocation of expenditure as was done by the assessee is more rationale and is in tune with the principles laid down by the Institute of Cost Accountants and also for the purpose of Company Law. Therefore, considering the detailed objections raised by the assessee as placed in the objections to the DRP, we are of the opinion that the allocation by the assessee is to be upheld. - Decided in favour of assessee

  Depreciation @ 25% on brought forward written down value of non-compete fee paid to amalgamating company - Held that:- As in assessee’s own case for assessment year 2008-09 wherein a similar issue contained corresponding Ground no.15(a) in the appeal for that year, was considered and decided in favour of the Revenue held that the cases against the assessee are more in number and there is a consistent view of the ITAT in not allowing the depreciation on non-compete fee. The non-compete fee is outcome of an agreement entered into between two parties. It does not represent any intangible asset, such as, know-how, patents, copyrights, trade marks, licences, franchises, etc. Therefore, in view of decision of the hon'ble Delhi High Court in the case of HindustanCoca Cola Beverages P. Ltd. [2011 (1) TMI 138 - Delhi High Court] non-compete agreement would not create an asset of intangible nature eligible for depreciation under section 32(1)(ii) of the Act. - Decided against assessee

  claim of depreciation on brought forward written down value in respect of non-compete fee paid to M/s. Medispan Ltd by Medicorp Technolgoies Ltd. in previous year relevant to assessment year 2002-2003 - Held that:- As in assessee’s own case for assessment year 2008-09 Even though the assessee's claim was crystallized by the Orders of the ITAT wherein the payment of fee was considered eligible for depreciation, the Assessing Officer did not grant the depreciation on the reason that reference application is pending before the Hon'ble High Court and the issue has not been finalized. This cannot be a reason for denying the depreciation claimed. Since, ITAT has already ordered the depreciation to be allowed in assessment year 2002-2003, consequently, depreciation has to be allowed by the Assessing Officer in this year. He is empowered to take rectification proceedings in case that order was not upheld by the Hon'ble High Court. In view of this, to that extent of claim of depreciation on brought forward written down value, Assessing Officer is directed to allow the depreciation after verifying the WDV figures. - Decided in favour of assessee

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• 2014 (12) TMI 1171
  

  Demand of duty on the finished goods clandestinely removed - demand of Customs duty on raw material used in the manufacture of the said finished goods. - Held that:- Res Judicata would not apply in the tax matters. Demand of duty on raw materials cannot be sustained when the demand was raised on the final product. This view is supported by the decision of the Tribunal in the case of M/s Sanjari Twisters (2007 (9) TMI 369 - CESTAT, AHMEDABAD) which is upheld by the Hon’ble Supreme Court [2008 (11) TMI 671 - SUPREME COURT] - in so far as the setting aside of entire amount of penalty under Section 11Ac of Central Excise Act 1944. Commissioner (Appeals) accepted that the clandestine removal of the final product involving demand of duty of ₹ 11,00,055.00. On a query from the Bench, ld.A.R. submits that the respondent has not filed any cross objection. Hence, the imposition of penalty under Section 11AC of Central Excise Act 1944 in respect of the demand of duty of ₹ 11,00,055.00 is warranted. The Hon’ble Supreme Court in the case of Union of India Vs Dharmendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT ] held that the demand of duty on extended period of limitation as well as the ingredients available under Section 11A, a mandatory penalty would be imposed. - Decided partly in favour of assessee.

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• 2014 (12) TMI 1170
  

  Disallowance of provisions for expenses - Held that:- It is to be seen that provision was made looking to the nature and quantity of expenses on a bona fide estimate. Had the assessee was having exact details of expenses then it could have quantified the expenses. It has made the provision because it was difficult to quantify the expense with supporting details. Thus n our opinion the assessee made the provision on a bona fide belief, while setting off the provision with the actual, certain amounts resulted to be excess. The moment such excess amount resulted assessee has returned it back and offered it for taxation. If this amount is disallowed here then it will be taxed twice, once in this assessment year and again in the year in which assessee has offered it. Whenever any provision is made for the expenses some plus and minus is possible because provision cannot be made with exactness. As far as the other aspect is concerned that assessee has offered it for the next year, we are of the view that after adjusting the account when assessee realized the real facts it offered the excess provision for taxation immediately in the subsequent year. Thus, looking into the entire facts and circumstances we are of the view that the disallowance does not call for and we delete the same. - Decided in favour of assessee.

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• 2014 (12) TMI 1169
  

  Penalty u/s 271(1)(c) - inaccurate particulars furnished by assessee in respect of value adopted for computation of capital gain in view of the mandatory provision of section 50C - CIT(A) deleted the addition - Held that:- As it is clear that the assessee has disclosed all relevant details as well as documents in support of its computation of Short term Capital Gain by taking into consideration the actual sale consideration received by the assessee. The fact of actual sale consideration received by the assessee has not been disputed by the Assessing Officer but the addition was made simply by applying the deeming provisions of section 50C. Therefore, in view of the various decisions as relied upon by the Ld. Authorized Representative as well as by the CIT(A), we do not find any error in the impugned order of CIT(A) in deleting the penalty levied u/s 271(1)(c). - Decided in favour of assessee.

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• 2014 (12) TMI 1168
  

  Reopening of assessment - undisclosed receipt of ₹ 50 lakhs - Held that:- During the course of hearing, a specific query was raised from the ld. D.R. as to what evidence they have collected during the course of search or thereafter, on the basis of which the Assessing Officer has formed a belief that the income chargeable to tax has escaped assessment in the hands of the assessee. No satisfactory answer was furnished by the ld. D.R. We have also carefully perused the seized documents and we find that there is a debit entry of ₹ 50 lakhs in the name of Mlik Kannauj, but this entry does not indicate that the amount of ₹ 50 lakhs was given to the Managing Director of the assessee. There may be hundred of Malik in Kannauj but on the basis of this dumb document, the reopening of assessment in the hands of the assessee is not permissible. Moreover, the searched party has also examined Shri. Sohanraj Gupta and the statement is also placed on record and at nowhere Shri. Sohanraj Gupta has deposed about payment of ₹ 50 lakhs to the assessee. In the absence of any relevant material, the reopening of assessment in the hands of the assessee is not proper. - Decided in favour of assessee

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• 2014 (12) TMI 1167
  

  Depreciation claim - entire cost of the assets have been claimed by the assessee and allowed as application of its income for charitable purposes - Held that:- We find the issue of the assessee's claim for depreciation on addition to assets acquired in the relevant period is to be allowed even if the entire cost of the same assets have been claimed by the assessee and allowed as application of its income for charitable purposes, since this issue has been held in favour of the assessee in a number of decisions of the co-ordinate bench of this Tribunal in the cases of Dr. T.M.A. Pai Foundation (2010 (2) TMI 1156 - ITAT BANGALORE ), Academy of General Education (2015 (9) TMI 272 - ITAT BANGALORE ) following the decision of the Hon'ble Bombay High court in the case of CIT V Institute of Banking reported in (2003 (7) TMI 52 - BOMBAY High Court ).

  Following the decisions of the Hon'ble Bombay High Court in the case of Institute of Banking (supra) and of the co-ordinate benches (cited supra in this para), we uphold the order of the learned CIT (Appeals) in allowing the assessee's claim for depreciation on new assets acquired and put into use during the relevant previous year under consideration, even if the entire cost of those assets have been claimed by the assessee and allowed as application of its income for charitable purposes. - Decided in favour of assessee.

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• 2014 (12) TMI 1166
  

  Determination of total income - disallowance of revenue expenditure incurred towards flooring and wiring in the assessee's hotel premises - 153A Assessment - contention of the assessee that since no incriminating evidence relating to this transaction was found in the course of search u/s.132 of the Act, the resultant disallowance was not called for in the assessment of income u/s.143(3) rws 153A - Held that:- Respectfully following the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Co. ( 2014 (8) TMI 642 - KARNATAKA HIGH COURT ), we hold that once the assessment is reopened, the Assessing Officer can take note of the income disclosed in the earlier return, any undisclosed income found during the course of search and also any other income which is not disclosed in the earlier return of income OR which is not unearthed in the course of search under section 132 of the Act, in order to find out and determine what is the 'total income' of each year and then pass the order of assessment.

  Treatment of expenditure incurred on renovation and cost of improvement of building leased as capital expenditure - revenue disallowing the assessee's claim that the said expenditure be allowed as revenue expenditure - Held that:- Whenever an expenditure was incurred in the process of earning profits it has to be allowed as revenue expenditure. In such a case the expenditure incurred by the assessee would be out of the ambit and purview of the provisions of Explanation 1 to Section 32 of the Act of the Act. In the case on hand, it is not in dispute that the expenditure was incurred for renovation. These expenses were incurred only for the purpose of carrying on day to day business and earn profits and do not result in the bringing into existence of any capital asset. Therefore, in our view, the learned CIT (Appeals) was not right in upholding the disallowance of the expenditure by holding it as capital in nature. We, accordingly, reverse the findings of the authorities below on this issue and allow the assessee's claim for deduction of expenditure incurred towards renovation of plant design system, computer cabling, fire detection and alarm system, plumbing, air conditioning work, electrical works, interior work etc. on the hotel/building taken on lease.

  Interest under section 234B and 234C - Held that: - As the assessee has filed returns of income for the three assessment years 2008-09 to 2010-11 under section 153A of the Act declaring the additional income, disclosed/admitted in the partners statement under section 132(4) of the Act in the course of search, as its income. In view of the above discussion from para 9 to 9.5.4 of this order, we uphold the decision of the learned CIT (Appeals) confirming the action of the Assessing Officer in levying interest under section 234B and 234C of the Act.

  Quantum of profit on suppression of unrecorded sales - Held that:- We concur with the view of the learned CIT (Appeals) that the said additions made by the Assessing Officer on account of profits earned on suppressed sales for Assessment Years 2008-09 to 2010-11 are unsubstantiated and therefore uphold the order of the learned CIT (Appeals) deleting the said additions as the conclusions arrived at by the Assessing Officer are farfetched, and the additions made on account of profit on suppressed/undisclosed sales, are not substantiated by any material evidence

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• 2014 (12) TMI 1165
  

  Waiver of pre deposit - Intellectual Property Right service - Penalty u/s 77 & 78 - Held that:- No element of temporality, either in inherence of title in the technical drawings in favour of the petitioner nor in the period for which the petitioner may beneficially use the know-how pursuant to the permanent transfer of technical drawings nor in the extent of the rights to use the technical know-how is evident. The agreement clearly and exclusively transfers permanently the technical drawings. Therefore, the transaction prima facie falls more appropriately within the ambit of sub-clause (a) of Section 65(66b) of the Act but is excluded therefrom in view of exclusion of permanent transfers from the ambit of the sub-clause. - On a prima facie construction of the terms of the agreement read as a whole and a holistic construction of its conditions and covenants, the conclusion is compelling that there is a permanent transfer of intangible goods, from the Swedish entity to the petitioner. Therefore the transaction falls outside the ambit of Section 65(55b)(a) of the Finance Act, 1994, since only a temporary transfer of Intellectual Property is comprehended within the meaning of sub-clause (a) i.e., Intellectual Property Right and the agreement between the parties discloses not a temporary but a permanent transfer. - Strong prima facie case in favour of the appellant - Stay granted.

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• 2014 (12) TMI 1164
  

  Penalty u/s 76, 77 & 78 - Suppression of facts - Bonafide belief - Renting of immovable property - Management, maintenance or repair services - whether penal action is invited under Section 76 and Section 78 of the Finance Act, 1994 - Held that:- Appellants have deposited Service Tax on being pointed out by the department. Regarding payment of Service Tax on rendering service of renting of immovable property, they expressed that they had bona fide belief that tax was not payable as Hon’ble Delhi High Court [2009 (4) TMI 14 - DELHI HIGH COURT] has stayed the provisions. It was through retrospective amendment only, tax was made applicable - appellants has made case for waiver of penalty in respect of service of renting of immovable property. However relating to failure to deposit of Service Tax in respect of Management, maintenance or repair services, no justification has come forward as it came out that levy of Service Tax was there w.e.f. 2001. However neither tax was paid nor information relating to disclosure of the availment of the credit in excess was mentioned in returns. Hon’ble High Court of Rajasthan’s judgment [2012 (11) TMI 955 - RAJASTHAN HIGH COURT] squarely fits into the facts of present case of suppression which is willful. - Decided partly in favour of assessee.

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• 2014 (12) TMI 1163
  

  Export of goods without following procedure under Central Excise - exporter claims to be SSI unit - goods were detained on the ground that prohibited or restricted goods is attempted to be exported and/or a person without having an IEC is attempting to export the goods. - Held that:- in case of an export, the authority should not unreasonably withheld the export unless the export is made to a prohibited goods or to a restricted goods and have not been permitted to leave the country. An exporter is obliged to adhere to the schedule to the export and if any disruption to such schedule is made by any such agency it may invite the cancellation of the said order and ultimately have the resultant effect on the economy of the country.

  If the Foreign Trade Policy itself provides for an export to be made upon obtaining the undertaking, this Court does not find that there is any justification on the part of the authority to continue with the order of detention.

  Customs authorities directed to allow the export to be effected and shall proceed with the investigation and/or the proceedings already initiated against the petitioner - Decided in favor of petitioner.

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• 2014 (12) TMI 1162
  

  Estimation of Turnover - CIT(A) estimated the income of the assessee at the rate of 3% of the sales at ₹ 29,42,380/- against ₹ 1,02,63,160/- assessed by the AO at the rate of 10% of the turnover - Held that:- Order of the Ld. CIT(A) is well reasoned. The assessee has explained that the facts and circumstances for the year under consideration were altogether different from that of preceding year. The assessee had diverted its business from being stockist of vehicles into consignee of the vehicles. Since there was not much requirement of investment of funds in consignment business, hence the risk factor involved was negligible.

  The turnover for the year under consideration had considerably increased in comparison to last year. It is commonly observed that when turnover is increased the profit margin is generally decreased. The assessed income of the assessee for the year under consideration even at the rate of 3% of the turnover at ₹ 29.40 lakhs was much more than the assessed income at the rate of 10% of the turnover of the preceding year at ₹ 13.57 lakhs. The Ld. CIT(A), after taking into consideration the facts and circumstances of the case and also taking into consideration the assessed income of the assessee in the subsequent year, has directed the assessment of income at the rate of 3% of the total turnover. We do not find any infirmity in the well reasoned order of the Ld. CIT(A) and hence the same is upheld. - Decided against revenue.

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• 2014 (12) TMI 1161
  

  Disallowance of advertisement and marketing expenditure - reopening of assessment - CIT(A) deleted the addition whether by acceptng additional evidence in contravention of Rule 46A without giving opportunity to the AO - transfer pricing adjustment - Held that:- As from the record that the documents highlighted by Ld. DR in support of his contention that there was violation of Rule 46A, it is found that these documents comprises of copies of agreement with distributor, statement of advertisement and marketing expenses showing details of bills, name of the distributors, amount and date of payment which were submitted by the assessee in the course of original assessment, wherein the assessment was framed u/s 143(3). Before AO during reassessment proceedings assessee vide his letter informed that all these documents were furnished before AO and TPO during original assessment proceedings and by considering the same vide order dated 25th January, 2005 passed u/s 92CA(3) has examined all materials relating to claim of expenditure of advertisement. Similarly AO vide his order dated 23rd February, 2005 advanced assessee’s claim after examining all these documents. Thus all these documents, as pin pointed by DR was not additional documents so as to invoke the provisions of section 46A. - Decided against revenue.

  As found that claim of such advertisement expenses were made on reimbursement basis, details of which were placed before the original assessment proceedings, completed u/s 143(3) on 28th February, 2005 as well as before Transfer Pricing Officer, who has allowed the assessee’s claim vide his order dated 25.01.2005 passed u/s 93A(3). The CIT(A) has also recorded the finding to the effect that the AO has not placed any material or evidence as mentioned in impugned assessment order to support that the expenses were bogus. The CIT(A) observed that a mere intimation from Investigation Wing cannot be basis for any addition. The finding recorded by CIT(A) has not been controverted, by department by brining any positive materials on record. Accordingly, we do not find any reason to interfere with the finding of CIT(A) resulting into deletion of addition on account of advertisement expenses. - Decided in favour of assessee.

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• 2014 (12) TMI 1160
  

  Penalty u/s 271(1)(c) - assessee has concealed its income by not showing the same u/s 45(1A) in spite of its known facts - CIT(A) deleted the penalty - Held that:- In the present case we find there was no furnishing of inaccurate particulars and concealment of income. The assessee has suffered loss on fire. It was duly disclosed in the Profit and loss account and in the audit report. AO did not allow loss as business loss by referring to provision of section 45(1A) of the Act. On appeal the ld. CIT(A) allowed the loss as business loss. In further appeal ITAT held that the same was not allowable as business loss. From the above we note that the issue was debatable and it cannot be said that the assessee had any malafide intention. It is a settled law that penalty cannot be imposed unless the conduct of the assessee is contumacious. It is also not the case that assessee’s case was a bogus claim which was prima facie liable to be disallowed. The assessee was under bona fide belief that the loss on fire will be allowed as business loss. If the AO does not agree with the assessee and hold that loss cannot be allowed as business loss it cannot lead to a conclusion that the assessee has furnished inaccurate particulars of income or has concealed any income. See CIT vs Reliance Petro products (P) Ltd (2010 (3) TMI 80 - SUPREME COURT) and Hindustan Steel Ltd vs State of Orissa(1969 (8) TMI 31 - SUPREME Court) - Decided in favour of assessee.

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• 2014 (12) TMI 1159
  

  Non deduction of TDS - whether wheeling, scheduling and transmission services amount availing of professional/technical services u/s 194J r.w. 9 (1)(vii)? - Held that:- As decided in ITO (TDS) Udaipur vs Hindustan Zinc Ltd [2015 (6) TMI 345 - ITAT JODHPUR] in identical wheeling and transmission charges paid to the State Power Utility Department holds that mere availing the power network system and making payments in lieu thereof does not amount to paying any ‘fee for technical services’. It has been observed that these activities do not involve any human element as per case laws CIT vs Bharti Cellular Ltd [2008 (10) TMI 321 - DELHI HIGH COURT] and Skycell Communications Ltd 'Compact Spinning System' The Dy. CIT [2001 (2) TMI 57 - MADRAS High Court ]. The co-ordinate bench concludes that section 194J aforesaid applies only in case some technology or technical knowledge is made available to others and not merely in a situation involving use of technical systems. Similar principle stands echoed by another coordinate bench in Maharashtra Electricity Distribution Co. Ltd vs Addl. CIT [2012 (8) TMI 519 - ITAT, MUMBAI].

  The Assessing Officer’s order is silent on both these counts i.e involvement of any human element or making available of any technology or technical knowledge. The lower appellate order does not state anything specific about this technical know-how aspect but draws inferences based on assessee’s agreements that some manual element is always embedded therein in distribution and wheeling activity. No details are quoted in support thereof. Therefore, we observe that the assessee’s identical wheeling, scheduling and transmission facilities availed from the TANGEDCO do not attract sec.194J(1) Explanation (b) of the Act. At this stage, the Revenue places strong reliance on Ajmeer Vidyut Vitran Nigam Ltd decision (2012 (8) TMI 742 - AUTHORITY FOR ADVANCE RULINGS). We quote section 245S(1) to observe that the said decision applies as a precedent only in specific conditions enumerated therein. The Revenue fails to draw any distinction on facts or refer to any case law to the contrary. - Decided in favour of assessee.

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• 2014 (12) TMI 1158
  

  Transfer pricing adjustment - Royalty payment was at arm's length which cover a substantial part of TPO's disallowance at ₹ 156,43,832/- - Held that:- We find that the TPO has made the elaborate order whereby he has only dealt with royalty aspect and not dealt with the other allied payments. The royalty payment has been allowed by the DRP. In these circumstances, assessee will be put to great hardship, if the TPO is given a second inning to make out a fresh case. Hence, we reject these submissions made by the Ld. Departmental Representative. - Decided in favour of assessee.

  Reimbursement of expenses disallowed - Held that:- Interest of justice demands that’s the matt4er may be remitted to the file of the A.O. Accordingly, this issue is remitted back to the file of the A.O. A.O. is directed to examine in detail the details and break-up in the time charts submitted by the assessee and thereafter consider the issue afresh - Decided in favour of assessee for statistical purposes.

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