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Showing 141 to 160 of 1898 Records
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2015 (12) TMI 1761 - ITAT DELHI
Allowance of expenditure as commission - Held that:- There was no basis for making any disallowance and the same was solely on ad hoc basis. We are in agreement with the findings of ld. CIT(A) that the AO had not brought any material on record to show that the commission expenditure was either bogus or was not an allowable deduction. It is well settled law that no ad hoc disallowance can be made unless the AO brings any specific detail on record which may call for any disallowance.
Advertisement expenditure allowance on product launches and on granty signs - nature of expenses - Held that:- Expenditure in question was in fact in furtherance of business of assessee and, thus, had direct nexus with its business, and by putting neon signs and glow signs, no assets of permanent nature was created, it was an allowable business expenditure - See CIT v. Citi Financial Consumer Fin. Ltd. [2011 (3) TMI 622 - DELHI HIGH COURT].
Royalty/WPC expenses - nature of income - as per AO royalty, which was paid, in order to get the right to use the spectrum, was capital in nature and allowed 25% of the amount claimed - Held that:- The impugned amount was paid as a protection fee and was not a payment which was necessary for running the business, as is in the present case. The assessee could not run the business without making these payments on quarterly basis and, therefore, by no stretch of reasoning this could be held as capital in nature. The issue is no more res integra in view of the decision of Hon'ble Delhi High Court in the case of Fascel Ltd.(2008 (12) TMI 743 - DELHI HIGH COURT) - revenue appeal dismissed.
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2015 (12) TMI 1760 - ITAT KOLKATA
Enhancement of rental income not sustaining the addition made u/s 48 - addition made on account of cessation of liability u/s 41(1) - Held that:- AO observed that the rent has not been revised, the assessee is expected to get higher rent in the relevant year are all on assumptions and presumptions without there being any evidence to that effect. With reference to the report of the Income Tax Inspector that, as a dubious from the AO’s assessment order that the lettable rental value in similar area in financial year 2008-09 is a minimum of ₹ 50/- per sq.ft., but, however, the CIT(Appeals) has rightly observed that the report of the Inspector in estimating the value cannot partake the assessment of an approved valuer, but for the reason of that the Income Tax Inspector is not technical person to submit valuation report. In absence of any evidence it is just improper to fix the rent on mere assumptions and presumptions, therefore, we confirm the order of the CIT(Appeals) on this issue and dismiss the ground no. 1 raised by the revenue.
Deduction allowed on the expenditure incurred during the transfer of an asset deduction can be allowed on the expenditure incurred during the transfer of an asset and it clearly shows that the burden is on the assessee to demonstrate that the expenses incurred for the transfer of asset is fulfilled. In the case on hand also, the assessee produced the bill issued by M/s. Sood Realtors & Developers and the amount paid by the assessee by way of cheque, therefore, the ld. CIT(Appeals) has rightly applied the principle laid down by the ITAT Pune Bench in the case of KRA Holding & Trading Pvt. Ltd. [2011 (5) TMI 498 - ITAT PUNE]. We are of the view that the CIT(Appeals) was rightly justified in directing the Assessing Officer to allow the said deduction.
Addition u/s 41 - Held that:- In the case on hand, the father of the assessee died long back, the said amount given by him as in the nature of personal loan to purchase a house property and also received from the estate of her father entered into the books of account of the assessee since long back. The assessee did not credit the said amount to her profit & loss account Therefore, in our view, scope of section 41(1)(a) is not applicable to the case on hand. Appeal of the Revenue is dismissed.
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2015 (12) TMI 1759 - ITAT MUMBAI
TPA - comparables selection criteria - functional dissimilarity - Held that:- We agree with the proposition of the Tribunal laying down the minimum turnover filter of ₹ 100 crores in the case of the assessee, because the selection of the comparables has to be seen both on quantitative and qualitative criteria. A turnover of a company most likely has a bearing on its comparability as the size of a transaction in absolute value or in proportion to the activities of the companies might affect the relative competitive positions of the buyer and the seller. Accordingly, we direct the TPO/AO to remove the comparables having turnover of ₹ 100 crores.
Comparable cannot be rejected on the export earning filter of 25%
The assessee company is engaged in the business of providing software development & export services mainly to its Associated Enterprises (AEs) i.e. Capgemini Group Companies and third parties. The main service line of the assessee company includes, software technology services; IT outsourcing services; and customizes service software development services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Deduction u/s.10A - adjustment of losses - Held that:- Losses of section 10A units have to be adjusted against taxable profits of other units after deduction under section 10A has been allowed in respect of each of the profitable unit under section 10A.
Reducing the telecommunication expenditure from the export turnover of the eligible units, the while computing deduction under section 10A - Held that:- As decided in assessee's own case these expenses have been incurred for the purposes of the business of software development at the software units in India. It is that finding which the Assessing Officer was unable to controvert or unable to bring any contrary material to disprove the same. It is in that light that the Tribunal found that the Assessing Officer could not have insisted on the deduction. It is that exercise undertaken by the Assessing Officer which has not been upheld but rather disapproved by the Tribunal. This is a finding purely on the facts and pertaining to the business of the assessee. The facts pertaining to the assessee's business of software development, the charges and which are claimed to have incurred, are in relation to the business of software development within India. They could not be said to be costs deductible from export turnover for the purposes of Section 10A of the Act.
Reducing the expenditure incurred in foreign currency from the export turnover of the units eligible, while computing deduction under Section 10A - Held that:- Tribunal in assessee’s own case for the assessment year 2009-10 wherein it is held it is similar to issue of telecommunication expenses and accordingly, decision of Bombay High Court will be followed. Thus, respectfully following the order of the Hon’ble Bombay High Court and the ITAT decision for AY 2009-10 we set aside the orders of the revenue authorities and direct the AO to delete the disallowance and compute the exemption as per law.
Disallowance of interest and expenses u/s 14A as expenditure incurred for earning dividend income - Held that:- So far as disallowance of interest the same cannot be made as admittedly, the assessee has huge surplus funds which are interest free and, therefore, no disallowance of interest should be made.
As regards the indirect expenses, the same has been disallowed under Rule 8D by the AO in a mechanical way, without satisfying himself after looking into the nature of accounts of the assessee and the nature of expenses debited in the books of accounts as per mandatory requirement of section 14A(2). If assessee’s investments are only in subsidiary companies and mutual funds, then it cannot be held that assessee might have incurred huge expenditure. The assessee had suo moto offered a sum of ₹ 50,000/- for disallowance, which in our opinion, is sufficient for attributing the indirect expenses for earning the exempt income of ₹ 2,83,000/-. - Decided in favour of assessee.
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2015 (12) TMI 1758 - ITAT DELHI
TPA - adjustment of selling and distribution expenses - as contented TPO has made adjustment on account of marketing and selling expenses incurred for promoting the sale of products in European countries and reduced the same from the price charged from unrelated parties in Europe - comparables selection - Held that:- The argument of the counsel on the premise that adjustment does not recognize the business realities that much higher expenses/cost is required to be incurred for selling the products in USA has already been considered by the CIT(A) who has held in this regard that the correct way of making adjustment is to start from the export prices charged by the assessee from the unrelated parties in non-US destinations therefore , the expenses incurred by GMI to develop a market for the assessee’s product do not have any relevance for the purpose of making adjustment on account of selling and distribution expense.
What is relevant for the purpose of this adjustment is the selling and distribution expenses incurred by the assessee for distributing its product in non- US locations. The TPO in his order has computed ₹ 0.27 per CD as the amount of adjustment that is required to be made on account of selling and distribution expenses. In this case the TPO has computed ₹ 0.27 per CD as the amount of adjustment that is required to be made on account of selling and distribution expenses. The assessee has not pointed out any defect in the analysis done by the TPO and, accepted by CIT(A). Comparables selected for the benchmarking analysis should be functionally similar and subject to similar business environment and risks. In view of the above the contention raised by the counsel is held to be not maintainable and therefore rejected.
Adjustment on account of geographical differences, we accept the claim of the assessee for adjustment. The CIT(A) or the TPO have not denied or disputed any of the above factual submission to the assessee. A rejection of a claim for general consideration for granting an economic adjustment which on the face of fit is tenable is not a correct way to disregard the facts brought on record. The revenue ought to have appreciated the business and the nature of the market. The observation of the TPO that the export price of 10.4-I-I-0 (Jewel-case CD box) to LG Electronics Inc. in USA was ₹ 13.59 per CD while sale prices of the same product in Poland and German, was ₹ 12.4 per CD is also found to be misconceived and therefore for the reasons stated above we allow the adjustment as claimed by the assessee.
Accordingly if the aforesaid adjustment is applied it is seen that the transaction of the assessee with the AE is at the higher than the arm’s length price and therefore the adjustment so made and sustained is deleted. Consequently we are not inclined to take up remaining objection raised by the learned counsel other than to hold that we find merit the submission that since the AE (GMI) had incurred loss therefore assessee could not be expected to have made more profits than the combined profit made the assessee and its AE i.e. GMI, if it were to make sales directly to the third party customers.
Adjustment on account of arm’s length price of international transactions cannot exceed the maximum arm’s length price i.e. the amount received by the associated enterprise from the customer and the actual value of international transactions. See Globe Vantedge (P) Ltd. vs. DCIT [2009 (12) TMI 668 - ITAT DELHI]- adjustment to be deleted - Decided in favour of assessee.
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2015 (12) TMI 1757 - ITAT KOLKATA
Disallowance of deduction u/s 80IC by allocating indirect expenses to the eligible Unit - as per revenue profit eligible for deduction under section 80IC is to be worked out after deducting all the direct and indirect expenses - Held that:- The words "derived from" has a narrow meaning, inasmuch as it contemplates first degree connection with the eligible Unit as held, inter alia, by the Hon’ble Supreme Court in the case of Pandian Chemicals Limited [2003 (4) TMI 3 - SUPREME Court] and this principle laid down in the context of income is also applicable for the allocation of expenses as held by the Coordinate Bench of this Tribunal in the case of Balarampur Chini Mills Limited -vs.- DCIT [2011 (7) TMI 1150 - ITAT KOLKATA] wherein held that expenses incurred by the assessee under the general head of Office Expenses, which are not directly incurred for the eligible Unit, cannot be said to have first degree connection with such Unit so as to reduce the same on pro rata basis for computing the profit of such Unit eligible for deduction - Decided against revenue
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2015 (12) TMI 1756 - KARNATAKA HIGH COURT
TDS u/s 194A - Co-operative Bank requirment to deduct tax while paying interest to its members on time deposits - Held that:- The Ministry of Finance, Government of India vide Circular No.19/2015 in F.No.142/14/2015- TPL, has held that the Co-operative Banks are not required to deduct tax at source on time deposits o f its members paid or credited on or before 1.7.2015.
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2015 (12) TMI 1755 - CESTAT HYDERABAD
Benefit of N/N. 21/2002-Cus., dated 1st March, 2002 - ‘kits’ for conversion of petrol and diesel vehicle into compressed natural gas/propane or liquefied petroleum gas driven vehicles - Held that: - Tribunal has in STANDARD CONSULTANTS LTD. Versus CC., CE. & ST. (APPEALS-II), HYDERABAD [2008 (9) TMI 656 - CESTAT, BANGALORE] held that the benefit of concession of additional duty at 5% is available on the goods imported.
Unjust enrichment - Held that: - the respondent has furnished a certificate of the Chartered Accountant indicating that the burden of duty has not been passed on - the ground of ‘unjust enrichment’ would not hold against the assessee.
Appeal dismissed - decided against Revenue.
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2015 (12) TMI 1754 - CESTAT NEW DELHI
Maintainability of appeal - in the impugned order Redemption fine of ₹ 1,82,392/- has been imposed on M/s. Metro but in appeal memo the amount of redemption fine has been mentioned as ₹ 2 lakhs - Held that: - the Committee of Commissioners has directed that the appeals is to be filed against M/s. Metro recording the fact that the learned Commissioner (Appeals) has reduced the Redemption Fine to ₹ 1,82,392/- and no proposal for imposing penalty on M/s. Metro but, in the Appeal Memo, the amount of Redemption Fine is shown as ₹ 2,00,000/- and penalty on M/s. Metro is proposed, the same is contrary to the Review Order. As the Revenue has not corrected the said discrepancies pointed out by the respondents, therefore, I hold that the appeal filed against M/s. Metro is defective, hence not maintainable.
The review order directs to file the appeal to the extent of demand of ₹ 28,07,0897- whereas in the appeal memo the amount of duty has been mentioned as ₹ 36,88,077/- and penalty was also sought to be imposed of ₹ 36,88,077/- - Held that: - appeal is defective. On that account itself, appeal is not maintainable against M/s. Pymen Cable India.
In the Review Order, there is no proposal to file the appeal against Shri Sandeep Garg and M/s. Ashok Cables Corpn - maintainability of appela against these persons - Held that: - in the impugned order, no penalty has been imposed on M/s. Metro. But M/s. Metro and Shri Sandeep Garg have challenged the impugned order before this Tribunal in Appeal Nos. E/120 & 121 of 2010 wherein this Tribunal held that no allegations are sustainable against them, therefore, no penalty is imposable on Shri Sandeep Garg, accordingly - appeal dismissed.
The Committee of Commissioners has proposed to file appeal against M/s. Ashok Cable Corporation, therefore, the prayer of the learned Counsel is not acceptable that the Committee of Commissioners has not proposed to file appeal against M/s. Ashok Cable Corporation - As there is no arguments advanced on the merits in this appeal, the same is required to be heard on merits, therefore, the Registry is directed to list the said appeal for hearing on 22.01.2016.
Application disposed off.
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2015 (12) TMI 1753 - ITAT PUNE
TPA - comparable selection criteria - Held that:- Assessee is into rendering software development services thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2015 (12) TMI 1752 - ITAT CHENNAI
Deduction u/s 80C - Disallowance of premium paid to LIC under "Employer- Employee Scheme" for treating the same as capital expenditure - close ended fund with a lock in period of 3 years - remand back
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2015 (12) TMI 1751 - ITAT INDORE
Unexplained cash credit u/s 68 - discharge of onus - Held that:- The assessee has received the loan of ₹ 15 lakhs from Smt. Purnima Tiwari. She was assessed to tax since 1987-88. She has given confirmation letter. She has PAN and also filed income tax returns. The computation of income, capital account and balance sheet were also submitted. The assessee has also submitted copy of her bank account fromwhere the assessee received the amount. The source of source was also explained. The assessee has paid interest and deducted TDS which is duly reflected in Form 26AS. The depositor is engaged in the business since long. The assessee also requested the Assessing Officer to issue summons to depositor but he did not act on the request of the assessee. All these facts cumulatively show that the assessee was able to discharge the onus placed upon it in terms of section 68 - Decided against revenue
Addition made on account of receipts not recorded in the books of accounts - Held that:- CIT(A) has rightly granted part relief to the assessee as both service tax and escort charges were shown separately in the profit and loss account on net basis. The learned DR failed to controvert the findings of the learned CIT(A). We, therefore, sustain the same.
Addition on account of disallowance out of certain expenses on the basis of discrepancies found therein - Held that:- CIT(A) has granted relief to the assessee on the ground that the vouchers prepared by computers and hand-writing and the entries made therein were narrative. The learned DR failed to controvert the findings of the learned CIT(A) with any positive evidence contrary to that. Considering all these facts, we sustain the order of the learned CIT(A) - Revenue appeal dismissed.
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2015 (12) TMI 1750 - ITAT KOLKATA
Compensation for giving up right to receive pension - nature of receipt - Held that:- This Tribunal in the case of Mr. Ramkrishna Agarwal -vs.- ACIT [2014 (7) TMI 1265 - ITAT KOLKATA] wherein a similar amount received by the assessee as compensation for giving up his right to receive pension was held to be capital receipt not chargeable to tax.
As rightly pointed out by the ld. D.R., the amount in question received by the assessee was never claimed by the assessee but although this claim was made by the assessee for the first time before the ld. CIT(Appeals), the impugned order of the ld. CIT(Appeals) does not show that he has verified the same from the relevant documentary evidence, such as the relevant partnership deed giving the assessee his right to receive pension, agreement whereby the right to receive pension, if any, was given up by the assessee for the amount in question, etc. He has contended that this matter may, therefore, be sent back to the file of the Assessing Officer for verifying the claim of the assessee. Ground No. 1 of the assessee’s appeal is accordingly treated as allowed for statistical purposes
Addition on account of share of goodwill received by the assessee on his retirement from the partnership firm - Held that:- As the issue involved in the present case as well as all the material facts relevant thereto are similar to the cases of Shri Amitabh Singh (2007 (6) TMI 304 - ITAT DELHI) decided by the Coordinate benches of this Tribunal, we respectfully follow the decision rendered in the said cases to hold that the amount in question received by the assessee as his share of goodwill on retirement from the firm is not chargeable to tax being capital receipt.
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2015 (12) TMI 1749 - ITAT MUMBAI
Scope of assessment u/s. 153A - undisclosed income and undisclosed assets detected during search could be brought to tax - Held that:- Undisputedly, during the course of the search and seizure operation, not a single piece of paper was found relating to the transactions. Moreover, the assessee filed original return on 31.10.2004 which was revised on 29.3.2006 pursuant to survey operations and in the revised return of income, the income offered during the survey operations were offered for taxation and the assessment has been made as such vide order dated 29.12.2006.
Thus, it can be seen that there is no material found at the time of search which can be said to be an incriminating material to justify the impugned additions and it is also not the case of the Revenue that the additions have been made on the basis of the materials found at the time of search. No reason/justification in making the impugned additions. Order of the Ld. CIT(A) is accordingly set aside. The AO is directed to delete the impugned additions.
Notice issued u/s. 143(2) - Held that:- We have given a thoughtful consideration to the chronological event relating to the filing of original return of income, revised return of income and notice issued u/s. 143(2) of the Act. Admittedly, the revised return of income was filed on 30.6.2006. As per the provisions of Sec. 143(2), the notice should have been issued on or before 1.7.2007. The notice was issued on 22.8.2007. Thus, the said notice u/s. 143(2) is bad in law which means that the revised return of income was accepted as such u/s. 143(1) which also means that a completed assessment can be opened only when some incriminating material was found during the course of the search.
Levy of penalty u/s. 271(1)(c) - Held that:- Since we have held the assessment made u/s. 143(3) r.w. Sec. 153A of the Act is bad in law of even date and since we have directed the AO to delete the impugned additions, drawing support from the maxim Sublato fundaments credit Opus meaning – in the case the foundation is removed, super structure falls. Since the foundation i.e. assessment order has been removed, the super structure i.e. penalty falls. Appeal filed by the assessee is allowed.
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2015 (12) TMI 1748 - ITAT JAIPUR
Maintainability of appeal - monetary limit - Held that:- Since the tax demand in dispute in each of these departmental appeals does not exceed the limit of ₹ 10 lacs as set out by CBDT, such appeals are not maintainable. Accordingly, the ld. DRs agree that these appeals of the Department may be treated as not pressed/withdrawn and dismissed in view of the CBDT Circular.
Apropos COs, we may mention that in terms of sec 253(4) of the I.T. Act, the right thereof depends on the survival of corresponding revenue appeal. Since all these revenue appeals are withdrawn / not pressed and are consequently infructuous and do not survive; as a necessary consequence the corresponding COs will also stand dismissed as not maintainable.
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2015 (12) TMI 1747 - ITAT PUNE
Deduction under section 36(1)(viia) - allowability of provision made on account of Standard Assets - Held that:- The issue arising before us is identical to the issue before the Tribunal in The Cosmos Co-op. Bank Ltd. Vs. DCIT (2014 (1) TMI 1696 - ITAT PUNE) as held the impugned claim is a contingent Provision made on the basis of a percentage on the value of standard assets. The Provision does not reflect any particular debt which is doubtful or bad and it is only a general and non-specific Provision and it has been rightly classified as a contingent provision by the income-tax authorities. In-fact, the learned counsel for the assessee, at the time of hearing, fairly conceded the contingent nature of the provision and therefore the lower authorities made no mistake in disallowing the same. Thus following the same parity of reasoning, we uphold the order of CIT(A) and confirm the addition.
Disallowance of depreciation on computer and software purchased - Held that:- In view of the admission of the assessee and in the absence of any details having been furnished as to the date when the said items were put to in use, which in turn were purchased on 30.03.2007, we uphold the order of CIT(A) in denying the deduction on account of depreciation on the said items of computer expenses. Further, two of the items have been purchased in the succeeding year i.e. on 28.04.2007 and 30.06.2007. No depreciation on the said items is allowable in the hands of the assessee during the instant assessment year.
Coming to the balance items purchased by the assessee which were held to be capital expenditure by the Assessing Officer and the addition was made to that extent in the hands of assessee, the assessee has revised its claim in respect of the same that the depreciation on such capital expenditure should be allowed in the hands of assessee. We find merit in the plea of the assessee in view of the evidence furnished on record in respect of the said assets being purchased in the months of November, 2006 and February, 2007 and once the asset has held to be capital in nature, depreciation on the same as per law, is allowable. We find merit in the plea of the assessee and accordingly, direct the Assessing Officer to allow depreciation on balance asset Nos.5 to 10 totaling ₹ 12,79,240/-, The ground of appeal No.2 raised by the assessee is thus, partly allowed.
Non-allowance of loss on sale of securities - Held that:- The nomenclature of the head under which the securities are held are not decisive for the assessee bank, hence, the loss arising on sale of securities was revenue in nature and the same was allowable. We find merit in the reliance placed upon by the learned Authorized Representative for the assessee and the issue arising before us is squarely covered by the ratio laid down by the Tribunal in Latur Urban Co-op Bank Ltd. Vs. DCIT (2015 (3) TMI 920 - ITAT PUNE). Following the same parity of reasoning, we hold that loss of ₹ 235.66 lakhs is allowable in the hands of the assessee.
Disallowance on account of commission paid to Pigmy deposit agents u/s 40(a)(ia) - Held that:- In view of the second proviso to section 40(a)(ia) of the Act, where the payee has paid the taxes, the issue may be sent back to the Assessing Officer for confirmation.
Claim of deduction under section 36(1)(viia) - assessee has re -worked the deduction to be allowed to it at ₹ 18,03,42,000/-, which admittedly is not allowable in the hands of the assessee, since no provision to that extent was made - Held that:- We find support from the ratio laid down by the Pune Bench of Tribunal in Shri Mahalaxmi Co-op. Bank Ltd. Vs. ITO (2014 (1) TMI 1366 - ITAT PUNE) and in view of the concession of both the Authorized Representatives before us, we dismiss the additional ground of appeal No.1 raised by the assessee.
Recognition of interest accrued on NPAs - Held that:- The Hon’ble Bombay High Court in CIT Vs. M/s. Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] has laid down the proposition that the interest accrued on NPAs is not taxable in the hands of assessee, in view of the guidelines issued by the RBI.
TDS u/s 194A - addition u/s 40(a)(ia) - whether the provisions of section 40(a)(ia) of the Act are attracted to an expenditure, which was not payable at the close of the year - Held that:- . The Pune Benches of Tribunal have consistently taken view that the said provisions are attracted irrespective of the expenditure being paid during the year and nothing being payable at the close of the year. Hence, where the assessee had made payment on account of interest expenditure to which the provisions of section 194A of the Act are applicable, the onus was upon the assessee to deduct TDS and in absence of the same, the said expenditure is liable to the disallowed in the hands of assessee, in view of the provisions of section 40(a)(ia) of the Act. We uphold the order of CIT(A) in this regard.
Second proviso to section 40(a)(ia) inserted by the Finance Act, 2012 - Held that:- We deem it fit to restore the matter back to the file of Assessing Officer, who shall consider the plea of the assessee based on the provisions of the Act inserted by the Finance Act, 2012 w.e.f. 01.04.2013 and in line with earlier order of the Tribunal dated 06.01.2014
Depreciation on expenditure incurred on computers and software purchased in earlier years - Held that:- We find merit in the plea of the assessee, in view of the order passed in assessment year 2007-08, wherein, certain expenditure incurred by the assessee was capitalized. The Assessing Officer is directed to allow the depreciation on the items capitalized in assessment year 2007-08 on which directions have been given to allow the depreciation.
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2015 (12) TMI 1746 - ITAT, COCHIN
TDS u/s 195 - non deduction of tds on agency commission paid to non resident agent - income deemed to accrue or arise in India - Held that:- Argument of the Revenue that for non deduction of TDS, obtaining of certificate from the concerned Assessing Officer is mandatory is not acceptable. On a plain reading of the provisions contained in Chapter-XVIIB of the Act, more particularly section 195, there is no absolute liability on the part of the assessee to deduct tax at source notwithstanding that the payment is not chargeable to tax under sections 4, 5 or 9 of the Act. It is reasonable to conclude that TDS provisions are attracted only when the payment is chargeable to tax in India.
The provisions of section 195 are not applicable to the case of the assessee as no income chargeable to tax in India has arisen. The disallowance of payment of commission u/s. 40(a)(ia) of the Act is incorrect. - Decided in favour of assessee.
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2015 (12) TMI 1745 - ITAT, CHANDIGARH
Exemption to the trust u/s 11 denied - proof of charitable activities - Held that:- Since as stated above the facts in the present case are identcial to that in the case of Hoshiarpur Improvement Trust (2015 (9) TMI 902 - ITAT AMRITSAR), respectfully following the same we hold that the assessee trust is carrying out charitable activity of advancement of public utility and the business activity carried out by it are incidental to the attainment of its main object and thus the proviso to section 2(15) is not attracted in the assessee case. We therefore hold that the assessee is entitled to claim exemption u/s 11. - Decided in favour of assessee.
Framing of assessment in the status of artificial juridical person - A.O. changed the status of the assessee from AOP to Artificial Judicial Person - Held that:- In view of the fact that we have held the assessee trust to be indulging in activities which constitute advancement of general public utility and hence charitable activities as defined u/s 2(15) of the Act, the status of the assessee shall be AOP as specified in section 164(2) of the Act. Section 164(2) states that where income is derived from property held under trust wholly for charitable or religious purposes, tax shall be charged on the taxable income if any in the status of AOP. In case of discretionary trust which are not covered u/s 164(2), the income is to be assessed in the status of individual. Thus we hold that the assessee trust be assessed in the status of “AOP” and not “Artificial Judicial Person”.
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2015 (12) TMI 1744 - APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI
Provisional attachment - offence under PMLA - Held that:- The appellant has failed to show that the advance of ₹ 33 lakhs received by him from Salve Regina Charitable Trust out of proceeds of crime was returned by him to Smt. Regina Seelan and failed to show that the subject property do not confirm to the definition of proceeds of crime in accordance with the provisions of Section 2(u) of the PMLA and therefore the same is not liable to attachment under PMLA.
Therefore, for the foregoing reasons, the appeal of the appellant fails and it is therefore, dismissed. Considering the facts and circumstances, the parties are however, left to bear their own costs.
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2015 (12) TMI 1743 - ITAT PUNE
Revision u/s 263 - CIT-A non exercising his own discretion and judgment - Held that:- The order of the Assessing Officer may be brief and cryptic but that by itself is not sufficient reason to hold that the assessment order is erroneous and prejudicial to the interest of revenue. It is for the Commissioner to point out as to what error was committed by the Assessing Officer in taking a particular view. In the case in hand, the Commissioner of Income Tax has failed to point out error in the assessment order. For invoking revisionary powers the Commissioner of Income Tax has to exercise his own discretion and judgment. Here the Commissioner of Income Tax has invoked the provisions of section 263 at the mere suggestion of the Dy. Commissioner of Income Tax, without exercising his own discretion and judgment.
The Mumbai Bench of the Tribunal in the case of Vinay Pratap Thacker Vs. Commissioner of Income Tax (2013 (2) TMI 838 - ITAT MUMBAI) has set aside the order of Commissioner of Income Tax passed u/s. 263 on the ground that the Commissioner of Income Tax had not used his own discretion and judgment in assuming the revisional jurisdiction. - Decided in favour of assessee
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2015 (12) TMI 1742 - ITAT PUNE
Disallowing reimbursement of expenses to ABSC - Held that:- The assessee drew our attention to the break-up of expenditure. However, he pointed out that it could not furnish the details before the authorities below as the same had been lost in floods. Even before us, the assessee failed to furnish any document or information though pressed that whether the payment was to the foreign affiliate or it was reimbursement was a factual issue. We find no merit in the stand of the assessee in this regard in the absence of basic details to substantiate its claim, the amount in question is to be added in the hands of the assessee. Upholding the order of CIT(A), we uphold the addition - Decided against assessee.
Disallowance of Excise duty on closing stock of obsolete inventory - Held that:- We find similar issue of advance payment of Excise duty in an accounting year, which is to be adjusted as and when goods were lifted by the assessee from its factory, was held as allowable as deduction under section 43B of the Act, since the said section recognized the deduction for payment of tax, duty, etc. as allowable on payment basis. See DCIT Vs. Glaxo Smithkline Consumer Healthcare Ltd. (2007 (7) TMI 334 - ITAT CHANDIGARH). Following the same parity of reasoning, we hold that the assessee is entitled to the claim of deduction of ₹ 10,06,000/- under section 43B of the Act as the aforesaid amount admittedly, was paid before the due date of filing the return of income for the instant assessment year, as certified by the Auditor in the audit report in Annexure 7 attached to the Form No.3CD, wherein it has been certified that the amount of Excise duty paid up to date of filing the return of income, exceeded sum of ₹ 1.86 crores.
Disallowance of sales commission paid to sales agents - onus to prove - Held that:- the onus is upon the assessee to establish that the said expenditure has been incurred for the purpose of carrying on its business activities. Merely because the expenditure has been incurred by the assessee, does not entitle the assessee to the said claim without discharging his onus. In the facts of the case, the Assessing Officer made enquiries from the respective parties through Revenue Department at Mumbai and Kolkata respectively. However, no evidence whatso ever was furnished by either of the two parties in support of services provided by them to the assessee and the expenditure incurred by them vis-à-vis the said income earned by them. The assessee also did not furnish complete details in this regard and in the absence of any evidence and the onus not having been discharged by the assessee, we find no merit in the claim of the assessee.
Addition made on account of software expenses - Held that:- The assessee for the year under consideration had also claimed to have incurred the expenditure on application software. However, the claim of the assessee was rejected being of enduring nature. We find no merit in the aforesaid disallowance made by the Assessing Officer in the case of assessee in view of the nature of expenditure incurred and also in view of ratio laid down in assessee’s own case in earlier years. We uphold the order of CIT(A) in allowing expenditure incurred by the assessee on application software - Decided against revenue
Addition made to the closing stock being provision for obsolete inventory - Held that:- The assessee was consistently following the method of accounting of its obsolete inventory which has been consistently followed from year to year. Where there is recognition of the value of obsolete stock on a scientific basis, then provision made on that basis cannot be objected to by the Assessing Officer as the Department has been accepting the consistent method followed by the assessee both in the earlier and subsequent years. In view of the principle of consistency and in the absence of any evidence brought on record to dis-believe the method followed by the assessee, we find no merit in the order of Assessing Officer in this regard. Further, even the Hon’ble Supreme Court in Rotork Controls India (P) Ltd. Vs. CIT (2009 (5) TMI 16 - SUPREME COURT OF INDIA) had upheld the provision for warranty made by the said assessee in its books of account and its admissibility being on scientific basis - Decided against revenue.
Allowing the losses suffered by newly set up EOU against its other business income - entitled to claim deduction under section 10B - Held that:- In the present case, the assessee has claimed the said deduction from assessment year 2005-06. Where the option is available with the assessee to claim the deduction under section 10B of the Act from assessment year in which it commences the business and not when the plant and machinery is first put in use, we find no merit in the ground of appeal No.3b raised by the Revenue in this regard.
The assessee is entitled to set off of losses of EOU unit against the other business income, if any, assessed in the hands of assessee for the captioned assessment year. Balance loss, if any, would be carried forwar d to the succeeding years to be adjusted as per the provisions of the Act. Accordingly, the ground of appeal No.3 raised by the Revenue is also dismissed.
Computation of deduction under section 80HHC - write back of the creditors to be included as business income eligible for deduction under section 80HHCHeld that:- The issue is squarely covered in favour of the assessee, where the credit balance written back, in turn relating to purchases made by the assessee. The Hon’ble Madras High Court in CIT Vs. Abdul Rahman Inustries (2006 (12) TMI 114 - MADRAS High Court) had held that the said write back of the creditors is to be included as business income eligible for deduction under section 80HHC of the Act. The learned Departmental Representative for the Revenue before us had made an alternate plea that once the same is included in the business profits, it should also be included in the total turnover of the unit. The assessee on the other hand, submits that the Assessing Officer had restricted himself in including the same in the business profit only. We find merit in the plea of the assessee in this regard and the said item relates to purchases and is not to be included in the total turnover of the eligible unit, while computing deduction under section 80HHC of the Act
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