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Showing 21 to 40 of 2843 Records
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2015 (10) TMI 2834
Penalty imposed u/s 271(1)(c) - depreciation at a higher rate on software development - HELD THAT:- In the case under consideration, the ld. CIT(A) gave a categorical finding that the assessee has made proper and full disclosure of its income and the higher percentage claimed in depreciation was only a bonafide error which was corrected by assessee. Therefore, the ratio laid down by the Hon’ble Supreme Court fully RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] supports and is applicable to the case of assessee. Accordingly, we do not find any infirmity in the order of CIT(A) in cancelling the penalty levied by AO u/s 271(1)(c) of the Act and the same is hereby upheld dismissing the grounds raised by the revenue.
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2015 (10) TMI 2833
Deduction u/s 80P(2)(a)(i) - Addition u/s 56 - bank interest received by the assessee - HELD THAT:- As assessee was a co-operative society engaged in the business of providing credit facility to its members. The assessee claims that it was engaged in the business of banking and consequently, the income earned by the assessee from its activities including the interest received from Union Bank of India against the FDR’s kept with the said bank, was income from business, which was eligible for deduction under section 80P(2)(a)(i) - Assessing Officer held that the interest income was assessable as income from other sources, in view of the ratio laid down by the Hon’ble Supreme Court in Totgars Co-Op. Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT]
In view of the ratio laid down by the Hon’ble Supreme Court in Totgars Co-Op. Sale Society Ltd. Vs. ITO (supra), the interest income from surplus fund / short deposits with the bank was assessable as income from other sources, which in turn, is taxable under section 56 of the Act. The said income assessed under the head ‘Income from other sources’ is not eligible for deduction under section 80P(2)(a)(i) of the Act.
The plea of the assessee that it was required to keep the funds in specified securities with the banks does not entitle the assessee to claim it as expenditure since the same being assessed as income from business being eligible for deduction under section 80P(2)(a)(i) of the Act. Accordingly, we uphold the order of CIT(A) in this regard.
Alternate plea of the assessee is that it has only positive income Assessing Officer had not disallowed any of the expenses in the hands of assessee - In view thereof, we find no merit in the directions of CIT(A) to the Assessing Officer to examine the claim of expenses made by the assessee and also the same as inadmissible under section 56 of the Act. On the other hand, in case the interest income of Rs.31,62,825/- is assessed under section 56 of the Act as income from other sources and there is net loss of Rs.20,94,884/- assessable in the hands of assessee as income from business, then in view of the provisions of the Act, the assessee is entitled to the claim the benefit of set off of business loss against the income from other sources of the instant assessment year. Accordingly, we direct the Assessing Officer to allow the claim of the assessee after due verification and in accordance with law.
Appeal of the assessee is partly allowed.
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2015 (10) TMI 2832
Levy of penalty u/s 114AA of the Customs Act, 1962 - price declared is lower than the initial export price of US $ 2.50 per KG - export of certain quantities of metalised film to M/s. Alcan Packaging Strongpack Public Company Ltd., Thailand through CFS, Ludhiana - HELD THAT:- It is an admitted fact on record that the impugned goods were originally exported by the appellant to its overseas buyer in February, 2010 and the same were rejected by its buyer in 2011 due to quality mis-matching. The goods in question were re-imported by the appellant nearly after 21 months from the date of original exportation. Since the impugned goods are not usable as such by the overseas buyer, the same were returned to the appellant at a lesser value. There is every possibility of reduction in price. It is not a case of the Department that the appellant while importing the said rejected goods has misdeclared or suppressed any other information to the Department.
The penal provisions contained in Section 114AA of the Customs Act, 1962 cannot be invoked inasmuch as the appellant has not furnished any incorrect price to the Department at the time of filing of the Bill of Entry for re-importation of the rejected goods or suppressed any facts to the Department.
Appeal allowed - decided in favor of appellant.
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2015 (10) TMI 2831
Violation of principles of natural justice - grievance of the petitioner is that the impugned assessment – cum – penalty proceedings were issued by the 1st respondent – Deputy Commercial Tax Officer on the grounds which were not mentioned in the show cause notice and also without furnishing the copies of the material relied on for passing the impugned order - HELD THAT:- The issue decided in case of M/S. CHITAMBER AGENCIES VERSUS COMMERCIAL TAX OFFICER, CIRCLE I, FLOOR [2015 (7) TMI 1414 - TELEGANA HIGH COURT] where it was held that considering the fact that the assessment orders are set aside, it is deemed appropriate to direct the respondent authorities to furnish the details to the petitioners within a period of four (4) weeks from today and complete the assessment proceedings within a period of three (3) months thereafter.
The impugned order is set aside and the writ petition is disposed of in terms of the judgement mentioned.
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2015 (10) TMI 2830
Income accrued in India - fixed place Permanent Establishment (PE) in India under article5(1), 5(2)(a) and 5(2)(c), a Service PE under Article 5(2)(l) as well as a Dependent Agent PE under Articles 5(4)(a) and 5(4)(c) of the India -USA DTAA - Whether the CIT(A) was justified in holding that the assessee has a PE in India/ - HELD THAT:- Taking a consistent view, we hold that the assessee has a fixed place PE in India, but has no dependent agent PE in India. Accordingly, ground raised by the assessee and the only ground raised by Revenue in their respective appeals are dismissed.
Attribution of profits to PE - We hold that since in the A.Y. 2002-03, the margin kept by assessee after payments to CIS is in loss, no profit attribution is available to PE in India. Ground No. 2 of assessee’s appeal is accordingly disposed of.
Levy of interest under section 234B - The charging of interest is automatic under the Act if the assessee has defaulted in payment of advance tax. The income of the assessee was not liable for withholding tax under section 195 of the Act. In this case we have no option but to hold. that the assessee is liable to interest u/s 234B, as the income being assessed now cannot be held. to be income liable to TDS under Indian provisions. The same is being assessed in the hands of PEs who had not filed their return on the ground that this income was not attributed to Indian Business Connection. Provisions of section 234B are mechanical in nature. In view of the above this ground of appeal of the assessee is dismissed.
Taxability on IPLC/link charges - As held payment is not taxable in the hands of the assessee as Royalty - We hold that there is no transfer of the right to use, either to the assessee or to CIS. The assessee has merely procured a service and provided the same to CIS, no part of equipment was leased out to CIS. Even otherwise, the payment is in the nature of reimbursement of expenses and accordingly not taxable in the hands of the assessee. Therefore, it is held. that the said payments do not constitute Royalty under the provisions of Article 12 of the tax treaty and the ground is allowed in favour of assessee.
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2015 (10) TMI 2829
Reopening of assessment u/s 147 - assessment Reopened after four years from the end of the relevant assessment year - eligibility of reasons to believe - HELD THAT:- Undisputedly in the instant case, nothing has been mentioned by the Assessing Officer that income chargeable to tax has escaped assessment on account of failure on the part of the assessee. Moreover, the issue on which assessment was reopened was already discussed by the AO in the original assessment. In the light of these facts, we are of the considered view that the assessment was reopened without the jurisdictional foundation u/s 147 of the Act. Therefore, the notice u/s 148 and subsequent proceedings are without jurisdiction and liable to be quashed - Decided against revenue.
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2015 (10) TMI 2828
Conspiracy - disproportionate sources of income - framing of charges - offences punishable under Sections 13(2) read with Section 13 (1) (e) of the Prevention of Corruption Act, 1988 - HELD THAT:- In the present case, the allegation against husband of petitioner is that he acquired disproportionate assets in his name and in the name of the petitioner and other family members out of ill gotten money. In case of P. NALLAMMAL VERSUS STATE REP. BY INSPECTOR OF POLICE [1999 (8) TMI 953 - SUPREME COURT], the Apex Court has held that if a non-public servant abets any offence committed by the public servant, such non-public servant shall also be liable to be tried along with the public servant.
The learned Trial Court after taking into account the materials available before it, directed for framing of charges against the petitioner. The details and particulars regarding the respective role of the accused have been drawn in the charge-sheet which makes the case against the petitioner triable. By no stretch of imagination can it be said that the materials available against the petitioner, taken to be ex facie true, do not constitute the offences alleged. It is admitted that out of 35 witnesses, 22 prosecution witnesses have already been examined. Thus, the trial is at the advance stage - It is settled law that at the time of framing of charge, the Court is not expected to hold mini trial and delve deep into the matter for the purposes of appreciating the evidence and the evidence can only be weighed when the entire material will be brought before the Trial Court. The Court was required to see at the time of framing charge whether a strong suspicion exists for commission of the offence. The Trial Court found prima facie case against the petitioner, accordingly framed charges.
By the present petition, inherent power of this Court under Section 482 Cr.P.C. has been sought to be invoked. The inherent powers are only meant to be applied ex debito justitiae in order to render real and substantial justice for the administration of which alone, the Court exists or to prevent the abuse of the process of the Court. It has been repeatedly held by this Court that the extraordinary powers under Section 482 Cr.P.C. has to be exercised sparingly and with great care and caution.
At the time of framing the charges, the Court had to see prima facie case, the material which is in the possession of the petitioner, cannot be considered at this stage. The Trial Court has to rely upon the charge-sheet and the material placed by the prosecuting agency. In the present case, the allegations against the petitioner and her husband are of severe nature, namely, abusing the official position. The petitioner alleged to have conspired with her husband and amassed assets as mentioned in the charge sheet and impugned orders as well.
This Court is not inclined to interfere therewith - Petition dismissed.
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2015 (10) TMI 2827
Non-appearance before the Tribunal on the date of hearing by assessee - HELD THAT:- As none appeared on behalf of the assessee though the notice was sent through RPAD. The notice has been sent on the address given on Form No.36. The assessee has not intimated change of address, if any, to the Tribunal. There is not even an adjournment petition received from the assessee.
Assessee is not interested in pursuing these appeals, and no useful purpose would be served by adjourning the hearing. Considering these facts and keeping in mind the provisions of Rule 19(2) of the ITAT Rules, as were considered in the case of Multiplan India [1991 (5) TMI 120 - ITAT DELHI-D] and in view of the decision of Estate of Late Tukoji Rao Holkar, [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] we dismiss these appeals in limine.
However, if the assessee on a later stage gives explanation in regard to its non-appearance before the Tribunal on the date of hearing before the Tribunal by filing a Miscellaneous Application as per the ITAT Rules and if the Bench is so satisfied these appeals of the assessee can be recalled for hearing on merit.
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2015 (10) TMI 2826
Validity of proceedings of the acquisition of the land of the petitioners - benefit of statutory provisions contemplated under Section 24(2) of Land Acquisition, Rehabilitation and Resettlement Act, 2013 - HELD THAT:- Considering either the basic provisions or by various pronouncements, the facts of this case are required to be analyzed. In the present case, it is not in dispute that final notification under Section 6 for acquisition of the land of the petitioners bearing Survey No.497/1 Khasra No.497/1 area ad measuring 5.696 hectare and the residential house situated at Village Lalguvan, Tahsil Rajnagar, District Chhatarpur was issued on 26.9.2003. It is also not in dispute that the award was passed under Section 11 on 30.11.2004. The said land was acquisitioned by respondent Nos.2 and 3 for the use of respondent No.1 indicating the public purpose - it is concluded that the award was passed more than five years prior to the date of commencement of the Act of 2013 and the said amount has not been paid or deposited by the Land Acquisition Officer to the beneficiaries, to observe the requirement of Section 24(2) of the Act of 2013 and the amended ordinance. Thus, the proceedings of the land acquisition would lapse so far as it relates to the petitioners are concerned.
On 7.10.2005 the possession of the land in question in the present petition has been delivered to the respondent No.1. No document has been brought on record indicating the fact that after acquisition and passing of the award, any notice was issued and served on the land owners. Nothing has been brought on record indicating the fact that in presence of the land owners and before the independent witnesses, possession has been taken from them, and thereafter, possession was delivered to the Archaeological Survey of India. In absence of the document of taking over of the possession from the land holders plea of following the procedure is of no consequence and by the said document, it cannot be presumed that the actual physical possession had been taken over from the land owners following the procedure prescribed, and then delivered to the respondent No.1 - looking to the documents brought by the respondents, it is apparent that actual physical possession of the land following the procedure has not been taken over by the respondents.
Both the contingencies specified under Section 24(2) of the Act of 2013 either of delivery of possession excluding the period of stay or the compensation paid by depositing it in the account of the beneficiaries or in Court has not been satisfied, bringing any material. In absence thereto, in view of the legal position discussed by various pronouncements, it is to be held that the contingencies specified under Section 24(2) of the Act of 2013 have not been satisfied by the respondents - the land acquisition proceedings insofar as it relates to the agricultural land pertaining to Khasra No.497/1 area ad measuring 5.696 hectare and the residential house situated at Village Lalguvan, Tahsil Rajnagar, District Chhatarpur would be deemed to be lapsed.
The land acquisition proceedings so far as it relates to the land in question shall stand lapsed - petition allowed.
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2015 (10) TMI 2825
Jurisdiction - power of Commissioner (Appeals) to remand the matter - HELD THAT:- The issue is no more res integra, in view of the decision of the Hon’ble Delhi High Court in the case of Commissioner of Service Tax, Delhi Vs. World Vision [2010 (10) TMI 894 - DELHI HIGH COURT]. The Hon’ble Gujarat High Court in the case of Commissioner of Service Tax Vs. Associated Hotels Ltd. [2014 (4) TMI 406 - GUJARAT HIGH COURT] held that the Commissioner (Appeals) have power to remand the matter.
All the appeals filed by the Revenue are dismissed. Early Hearing application is rejected as infructuous.
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2015 (10) TMI 2824
Taxability of the undisclosed receipts of business found during the course of search - HELD THAT:- Notably, in so far as the nature of such unrecorded receipts is concerned, there is no dispute between the assessee and the Revenue. Both sides agree that the undisclosed receipts found during the course of search are a part and parcel of the business of the assessee of developing real estate properties. In this factual background, in our view, the same methodology ought to be adopted to assess income embedded in such undisclosed receipts, as has been accepted by the Revenue in the regular assessments.
No doubt, at the time of search assessee offered income from such undisclosed receipts in the respective years of receipt, which was a departure from the regular methodology of computing, income accepted by the Revenue. Notwithstanding the aforesaid, in the returns of income filed in response to the notices issued under section 153A of the Act for the captioned assessment years, the assesseecompany declared income from such undisclosed receipts as per the regular methodology accepted by the Revenue in the regular assessments. The stand of the Assessing Officer, in our view, leads to an inherent contradiction in the final assessment because the resultant income would be a mix of two methodologies. Firstly, the resultant income contains income from business computed on the basis of regular methodology and secondly, income in relation to undisclosed receipts of the same business, which is assessed on receipt basis. To obviate such inherent contradiction, in our view, assessee- company had rightly asserted at the time of filing of returns of income under section 153A of the Act that the income from undisclosed receipts be also computed as per the regular methodology accepted by the Revenue in the past. Therefore, on this aspect we uphold the plea of the assessee.
Addition made under section 69C of the Act for unexplained cash expenditure - CIT-A restricted the addition telescoping benefit against the unexplained expenditure found noted in the search material - HELD THAT:- We do not find any infirmity in the decision of the CIT(A), which is ostensibly based on the facts emerging from the record. Thus, the order of the CIT(A) on this aspect is affirmed and Revenue fails in its appeal for assessment year 2005- 06.
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2015 (10) TMI 2823
Disallowance which represented Data ‘Processing Costs’ paid to the Head Office - HELD THAT:- Head Office has acquired its main banking software and when the assessee branch was set up in India in Mumbai the software licence was amended to allow the branch also to use the same software making it accessible through the servers located at Belgium. Since the branch in India is using the IT resources situated at Belgium and paid by the Head Office, the branch reimbursed to the Head Office pro-rata cost for the use of the said resources. The aforesaid expenditure was not allowed by the AO, as according to him, the said expenditure was in the nature of royalty and, therefore, tax was liable to be deducted at source, which the assessee had not deducted. Therefore, as per the Assessing Officer such expenditure was hit by the provisions of section 40(a)(i) of the Act. The aforesaid stand of the Assessing Officer was in line with his stand for the earlier Assessment Years 2004-05 to 2006-07.
It was a common point between the parties that in Assessment Year 2004-05 [2014 (3) TMI 726 - ITAT MUMBAI] the Tribunal has decided the said issue in favour of the assessee as held that the data processing cost paid by the assessee does not amount to royalty and, therefore, there was no requirement of deduction of tax at source so as to warrant the application of section 40(a)(i) of the Act. Following the aforesaid precedents, which continue to hold the field, we allow the plea of the assessee. Accordingly, on this aspect the Assessing Officer is directed to delete the addition made out of the data processing costs. Thus, on this aspect the assessee succeeds.
Interest paid to Head Office on subordinated debts and Term borrowings - HELD THAT:- As the relevant tax has been deducted and paid in the course of the impugned assessment year, it is contended that the same be allowed as a deduction in the current assessment year also. We deem it fit and proper to direct the Assessing Officer to apply the precedents in assessee’s own case in the past years and rework the income on this aspect accordingly and also by taking into account assessee’s plea for a further deduction purported to have been disallowed in the earlier Assessment Years on account of provisions of section 40(a)(i) of the Act. Thus, on this aspect assessee succeeds for statistical purposes.
Taxability of interest on subordinated debts and Term borrowings by the Head Office from the India Branch - HELD THAT:- Having regard to the decision of Hon’ble Calcutta High Court in the case of ABN Amro Bank.N.V. [2010 (12) TMI 340 - CALCUTTA HIGH COURT] the same is not taxable in the hands of the Head Office. We find that in A.Y 2004-05 he Tribunal has considered an identical controversy. As per the Tribunal, since the assessee was eligible to the benefits of tax treaty between India and Belgium, interest could not be taxed in the hands of the assessee being a foreign enterprise being payment to self, but the same is deductible while determining the profits attributable to its Permanent Establishment, which is taxable in India as per the tax treaty. Following the aforesaid precedent, we direct the Assessing Officer to re6 work the tax liability accordingly. Thus, on this aspect also assessee succeeds.
Deduction of interest paid on income tax while computing the income of the assessee - HELD THAT:- The relevant facts were that assessee had disclosed certain interest income in the return of income which represented interest received from the income tax department under section 244A of the Act net of the amount of interest paid to the income tax department under section 220(2) - The assessment was originally completed under section 143(3) of the Act accepting the said position as such. Thereafter, the assessment was sought to be reopened by issuing notice under section 148 on the ground that instead of net interest, the entire interest received under section 244A of the Act was required to be offered for taxation, since under section 40(a)(ii) of the Act income tax paid or payable does not constitute deductible expenditure. In this background, assessee therein preferred a Writ Petition before the Hon’ble High Court contending that the reopening of assessment was bad in law because assessee had disclosed fully and truly all material facts pertaining to assessment.
The aforesaid controversy has been addressed by the Hon’ble High Court and the stand of the assessee was upheld, as according to the Hon’ble High Court the invoking of section 147/148 of the Act was invalid having regard to the facts and circumstances of the case. In our considered opinion, the controversy before us has been directly answered by the Hon’ble Supreme Court in the case of Bharat Commerce Industries Ltd.[1998 (3) TMI 2 - SUPREME COURT] and that the judgment of the Hon’ble Bombay High Court sought to be relied upon by the assessee in the case of Arthur Anderson & Company [2010 (3) TMI 322 - BOMBAY HIGH COURT] is not in the context of the issue relating to deductibility of payment of interest for default in payment of advance tax.
Appeal of the assessee is partly allowed.
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2015 (10) TMI 2822
Ex-parte orders of CIT - application of adjournment sent to CIT (A) by Speed post requesting for adjournment because the counsel of the assessee company CA Shri Shailesh Kumar Gupta had undergone left eye surgery for cataract along with Hospital Discharge Summary - HELD THAT:- Considering this fact that the counsel of the assessee had undergone left eye surgery for cataract on 28.01.2014 and last two dates of hearing before CIT (A) were 10.02.2014 and 18.02.2014, we feel that in the interest of justice, the assessee deserves one more opportunity. Accordingly, we set aside the order of CIT (A) in both years and restore the entire matter back to his file for fresh decision in both years after affording reasonable opportunity of being heard in both years. In view of our decision, we do not make any comment on merit of the issues raised by the assessee in these appeals.
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2015 (10) TMI 2821
Maintainability of public interest litigation petition - Chapter IV Rule 3 of the Allahabad High Court Rules, 1952 - HELD THAT:- Once directives have been issued then present public interest litigation petition is disposed of with the direction that the High Court Bar Association shall abide by the aforesaid mentioned directions issued on the Administrative side of this Court by Hon'ble the Chief Justice.
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2015 (10) TMI 2820
Deduction u/s 80IB - Denial of deduction as assessee has not obtained the completion certificate from the local authority before 31/03/2008, which is mandatory as per explanation-2 to section 80IB(10) - HELD THAT:- We note that section 80IB (10) of the Act was substituted by the Finance (No.2) Act, 2004, w.e.f. 01/04/2005 and prior to its substitution sub-section (10), as amended by the Finance Act, 2000, w.e.f. 01/04/2001 and Finance Act, 2003, w.r.e.f. 01/04/2002 provides 100% of the profit derived in any previous year relevant to any assessment year from such housing project approved before 31/03/2005. Thus, time project completion time limit is not provided in the section. The project of the assessee commenced in the financial year 2003-04 i.e. before 01/04/2005. Circular no.772 dated 23/12/1998 with respect to tax incentive provision/tax holiday supports the case of the assessee.
There is uncontroverted finding in the impugned order that identical issue was decided for A.Y. 2008-09 on 28/03/2011 holding that the project under taken by the assessee had not commenced prior to 01/10/1998, wherein, the Assessing Officer was directed to allow the claimed deduction. No contrary decision was brought to our notice contradicting the finding recorded in the impugned order, thus, we find no infirmity in the order of the Commissioner of Income Tax (Appeals) on these issues raised by the Revenue, consequently, the appeal of the Revenue is dismissed.
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2015 (10) TMI 2819
TP Adjustment - exclusion of comparables by the DRP from the set of comparables companies chosen by the TPO - contention of revenue that these companies qualify all the qualitative and quantitative filters applied by the TPO and therefore the DRP was wrong in directing the exclusion of these companie - HELD THAT:- Revenue has raised a general ground without specifying or bringing on record material to establish why it considers the decision of the DRP to be erroneous. We find that the DRP has given elaborate reasons for directing the exclusion of each of the companies. In the absence of any material evidence to controvert the findings of the DRP, the contentions of Revenue in this ground remain unsubstantiated and therefore we are unable to concur with the same. In this view of the matter, we dismiss Ground No.1.
Risk Adjustment - Revenue contends that risk adjustment is not required in this case as the assessee face risks like political risk, foreign exchange risk and also market risks - Since these details and quantification of the assessee's claim for risk adjustment has only been placed before us and was not before the authorities below, we deem it appropriate to remand this issue back to the file of the TPO with a direction that the TPO examine the assessee's claim for risk adjustment and allow the same if the facts of the case on hand so warrant such adjustment. Needless to add, the assessee shall be afforded sufficient opportunity of being heard and to make its submissions in this regard which shall be considered by the TPO before he takes a decision in the matter. It is ordered accordingly.
Comparable selection - IDL (India) Ltd - It is seen that the facts submitted by the assessee in this regard emerge from the records. This company was included in the list of comparables chosen by the assessee in its T.P. Study. We find that the TPO has indeed mentioned in the T.P. order that this company is ‘functionally comparable and acceptable’. That being so, it is not clear as to why this company was not selected and included in the final set of comparables and why this company did not figure in the search process conducted by the TPO. In this view of the matter, we consider it appropriate to remand this issue to the TPO for consideration with a direction that the TPO may consider the submissions made by the assessee for inclusion of this company in its list of comparables. Needless to add, the assessee shall be afforded adequate opportunity of being heard and to make submissions/file details in this regard which shall be considered by the TPO before deciding the issue.
Kores (India) Ltd. - Business and Computer Systems Division is involved in a variety of operations like marketing of equipment relating to banking, postal offices, etc and after sales services including software support. The after sales services referred to in this division is an insignificant component of the revenue of the company and therefore it is not appropriate to compare the division of this company with the Market Support Services performed by the assessee. We find that the DRP has given detailed reasoning for rejection of this company as a comparable company to the assessee in the case on hand. Before us, the assessee had failed to adduce any material evidence to controvert the findings of the DRP. In this factual matrix, we find no infirmity, in the order of the DRP that would require our interference and therefore uphold its decision to exclude this company from the set of comparables to the assessee.
Computation of Margin - as submitted by the assessee that the assessee has computed the margin of Cyber Media Research Ltd./IDC (India) Ltd - We have perused the relevant portions of the TPO’s order and find that the OP/Cost is given by the TPO at 13.68% (Page 6 of TPO’s order) and later computed at 19.52% (Page 9 of TPO’s order). In these circumstances, the TPO is directed to verify the above contention of the assessee and adopt the correct margin of IDC (India) Ltd. / Cyber Media Research Ltd. after affording the assessee adequate opportunity to be heard and make submissions in the matter, which shall be considered by the TPO before coming to a finding in the matter. It is ordered accordingly. Consequently, Ground No.6.3 is allowed for statistical purposes.
Comparables for Global Support Services Segment - G.K.Consultants Ltd. - From the TPO’s order, it is not clear as to whether the TPO has examined this aspect of the company operating in several segments out of which professional services is only a small portion. It is also not clear as to whether the TPO has adopted the segmental details or the entity level details. In fact, the DRP has directed that it is to be ascertained whether segmental margins were adopted or entity level margins. In this factual matrix as discussed above, we are of the view that it would be appropriate to remand the issue back to the file of the Assessing Officer / TPO to examine the comparability of this company with the assessee, in the light of our observations above and if this company is found comparable, to adopt the margins as per the segmental details.
Maruti Insurance Agency Logistics Ltd. - As seen from the orders of the Insurance Regulatory & Development Authority (‘IRDA’) that this company is a group entity belonging to the Maruti Suzuki Ltd. group and is acting as its corporate agent. In that order of the IRDA, it has been held that no insurer is supposed to be granted license to act as corporate agent on the basis of reputation and strength of the applicant firm and a finding has been rendered that the corporate agent; namely this company has violated the statutory provisions. We find that the documents filed before us were evidently not placed before the TPO and DRP and therefore this aspect has not been examined by the authorities below. In this view of the matter, we deem it appropriate to remand the issue back to the file of the Assessing Officer / TPO to examine the comparability of this company with the assessee.
Inclusion of CRA Management Consulting Services Ltd. (‘ICRA’) and Pagaria Energy Ltd. - Evidently these two companies have not been selected as part of or as a result of any search process and therefore could be a case of “cherry picking” by the assessee. However, it is also a fact on record that the assessee had included the Global Support Services Segment in the Distribution Segment and therefore had not conducted an independent bench marking for this segment. Therefore, if the Global Support Services Segment is considered as a separate segment, as has been done by the TPO, the assessee should have the right to conduct its search process and select its set of comparables; which of course will be subjected to the examination and scrutiny of the TPO. In this view of the matter, we deem it appropriate to remand the issue back to the file of the Assessing Officer / TPO to examine the comparability of these two companies with the assessee
Working Capital Adjustment - On perusal of the orders of the authorities below, we find that the DRP has granted the assessee working capital adjustment, subject to the upper limit of average cost of capital of the comparables. The Assessing Officer / TPO is directed to examine the assessee's claim for and allow working capital adjustment vis-à-vis the comparable companies, in accordance with law, if so warranted.
Risk Adjustment - This claim was put forth before the DRP, though bereft of any detailed quantification of the adjustment claimed on account of risk differential. However, before us, as submitted by the learned Authorised Representative of the assessee has submitted its documentation in respect of risk adjustment and quantification of its claim - Since these details and quantification of the assessee's claim for risk adjustment has only been placed before us and was not before the authorities below, we deem it appropriate to remand this issue back to the file of the TPO with a direction that the TPO to examine the assessee's claim for risk adjustment and allow the same if the facts of the case on hand so warrant such adjustment. Needless to add, the assessee shall be afforded sufficient opportunity of being heard and to make its submissions in this regard which shall be considered by the TPO before he takes a decision in the matter.
Benefit of + / - 5% as set out under the proviso to Section 92C(2) - The new section 92C(2A), mandates that if the AM price falls beyond + / - 5% from the price charged in international transactions, then the assessee does not have any option referred to in Section 92C(2) of the Act. Thus, as per the above amendment, it is clear that the + / - 5% variation is allowed to justify the price charged in the international transactions and not for adjustment purposes. The aforesaid amendment has settled the issue and accordingly, the 5% benefit is not allowable in the assessee's case. In view of the retrospective amendment by way of insertion of Section 92C(2A) w.r.e.f. 1.4.2012 brought about therein by Finance Act, 2012, this Ground of the assessee's appeal is not maintainable and is accordingly dismissed.
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2015 (10) TMI 2818
Whether supply of ready mix concrete and carrying out the ancillary and incidental activities of pouring, pumping and laying of concrete would call for service tax liability or not? - HELD THAT:- There are no reason to entertain the civil appeal which is, accordingly, dismissed.
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2015 (10) TMI 2817
Addition on account of commission expenses claimed on sales - No proof of business use of the expenditure claimed - whether merely furnishing of confirmations, PAN, copy of return and bank statements cannot in all cases tantamount to satisfactory discharge of onus the part of the assessee company, in establishing that services were actually rendered by the brokers? - HELD THAT:- As relying on own case [2015 (1) TMI 98 - ITAT JAIPUR] books of account are audited which has been accepted by the Assessing Officer, sale and purchase have been treated genuine, but doubted the commission payment and the AO made addition on surmises and conjectures. Therefore, we are of the considered view that commission paid by the assessee either on sale and purchase are allowable as the expenses incurred wholly and exclusively for the purpose of business u/s 37 - Decided in favour of assessee.
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2015 (10) TMI 2816
Disallowance u/s 14A r.w. Rules 8D(2)(ii) - HELD THAT:- As decided in own case [2015 (5) TMI 727 - ITAT DELHI] sole ground of the assessee is allowed with a direction to the AO that the disallowance u/s 14A read with Rule 8D(iii) of the I.T. Rules should also be made for the year under consideration in this appeal i.e. for A.Y. 2008-09 and the AO is also directed to give set off of amount of suomoto disallowance already made by the assessee in the computation of returned income.
We, therefore, by respectfully following the aforesaid referred to order restored this issue back to the file of the AO to be decided in accordance with the directions given vide order dated 20.05.2015 in assessee’s own case [2015 (5) TMI 727 - ITAT DELHI] for the assessment year 2008-09.
Disallowance on account of diminution in value of fertilizer bonds - assessee received Fertilizers Companies, Government of India, Special Bonds against the fertilizer subsidy from the Government of India, as per Scheme, against the sale of fertilizer - HELD THAT:- As decided in own case [2015 (5) TMI 727 - ITAT DELHI] for the assessment year 2008-09 e fertilizer bonds received by the assessee in lieu of cash subsidy also deserves to be given the same treatment as foreign exchange because foreign exchange is also received in lieu of cash/Indian National Rupee (INR) and the same is also shown as current trading assets in the books of accounts as per well accepted accounting principles. - Decided against revenue.
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2015 (10) TMI 2815
Seeking to transfer of the investigation arising out of I-CR. No. 149/2011 registered on the basis of FIR lodged by Mr. K.D. Panth at Ghatlodia Police Station, Ahmedabad, (Rural) - proceedings for contempt Under Article 129 of the Constitution read with Contempt of Courts Act - HELD THAT:- It cannot be said that the Petitioner has come to this Court with clean hands. Firstly the Petitioner kept quiet for a period of 9 years as to the factum of meeting dated 27.2.2002. Then he was exchanging e-mails for ascertaining the time and presence of the persons at Ahmedabad. In case he was present in the meeting it was not required of him to ascertain those facts. Petitioner did not state fact of meeting dated 27.2.2002 in statement recorded by SIT in 2009. The explanation offered by the Petitioner for said omission that his statement was recorded in the year 2011 before SIT Under Section 161 Code of Criminal Procedure as such he made all disclosures. The SIT was same, having same powers all the time. Petitioner is a senior IPS officer thus the explanation of the Petitioner does not appear to be prima facie credible.
No case is made out to constitute SIT. No doubt about it "be you ever so high the law is above you" is a well accepted principle but in the instant case the conduct of the Petitioner cannot be said to be above board. Neither it can be said that he has come to the court with clean hands. Petitioner was a high ranking officer but he too cannot be said to be above law. He must undergo the investigation as envisaged by law in case he has committed the offences in question.
Coming to question whether criminal contempt proceedings to be initiated, as prayed, learned senior Counsel appearing for Petitioner has heavily relied upon e-mail exchanges filed by Petitioner allegedly from e-mail account of the then AAG with respect to which offence CR. No. 3148/2011 Under Section 66 of the IT Act has been registered. The allegation against Petitioner is of hacking of account and tampering with e-mails with respect to which an FIR has been filed, without meaning to deciding the correctness of the e-mails they are being looked into only for the purpose whether criminal contempt of the Court has been committed.
The e-mail exchange between the then AAG and other functionaries tantamounts to causing prejudice or amounts to substantial interference in any other manner in due course of justice. It is not the case of scandalizing the court or in any manner affecting fair decision of the court or undermining the majesty of the Court/people's confidence in the administration of justice or bringing or tending to bring the court into disrepute or disrespect which tantamount to criminal contempt Under Section 2(c)(iii) of the Contempt of Courts Act.
Petition dismissed.
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