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Showing 361 to 380 of 19685 Records
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2015 (12) TMI 1548
Transfer pricing adjustment - comparable selection - Held that:- Comparable companies, performing the same specified support services as that of the assessee company cannot be found, and hence only companies which have broad comparative functional profile of undertaking support services in other fields, have to be taken as comparables. This is for the reason that the assessee is specialized in providing emergency assistance and support services to the members/clients of AE.
Educational Consultant India Limited, ICRA Management & Consulting Services Ltd., Indian Tourism Development Corporation Ltd., excluded from the list of comparable companies
Global Procurement Consultant Limited rightly be taken as the comparable by the TPO
HCCA Business Services Pvt. Ltd. company is to be included as a comparable. - Decided partly in favour of assessee
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2015 (12) TMI 1547
Exemption u/s. 10A - Held that:- CIT(A) correctly allowed the claim of the assessee observing that the assessee had satisfied the conditions for eligibility to claim exemption under section 10A of the Act. Also observed that the assessee’s claim has also been allowed for the two assessment years following its inception. The assessee has duly proved by various evidences that the business was actually carried out by the assessee and that there were 88 employees employed by the assessee and they were having the requisite expertise and qualification required for the work of the assessee and that the assessee had actually carried out the business during the relevant financial year. All the claims have been duly verified by the AO and in view of this, he deleted the addition. - Decided against revenue
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2015 (12) TMI 1546
Right to be exempted from depositing the tax (TDS) liability on assessee bank before filing an appeal - whether the petitioner-Bank had raised the contention before the ITO with regard to the benefit granted to the petitioner Bank under the proviso attached to Section 201 (1) of the Act or not? - Held that:- The demand can be stayed by the learned Commissioner, provided that demand in dispute relates to issues that have been decided in assessee’s favour by an Appellate Authority, or the Court earlier. However, the learned counsel for the petitioner has not been able to show this Court as to which Appellate Authority, or by which Court the issues involved in the present case have already been decided, that, too, in favour of the petitioner-Bank. Thus, obviously, the petitioner-Bank cannot claim that it falls under illustration (a) of para-C of Instruction No.1914.
For a statutory duty has been imposed upon the Bank to deduct the TDS. In case the Bank does not deduct the TDS, it has to face the consequences as mentioned in Section 201 of the Act. Since Section 249(4) of the Act imposes a duty upon the assessee to deposit the entire amount, before that appeal can be admitted, the Bank cannot escape from its liability to follow the mandate of Section 249(4) of the Act. Although Instruction No.1914 does create exception to Section 249(4) of the Act, as mentioned above, the petitioner-Bank cannot take any benefit from Instruction No.1914, as it does not come within the ambit and scope of the said instruction. - Decided against assessee.
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2015 (12) TMI 1545
Penalty u/s.271(1)(c) - change in head of income - assessee as a housing cooperative society has shown the receipt from mobile company, in income and expenditure account and surplus of this account has not been considered/offered as income on the principal of mutuality - CIT(A) has treated the receipts from allowing the terrace to be used or installing telecommunications network as business income - Held that:- No conscious act on the part of the assessee for concealing the particulars of income. In our opinion, there is no justification to support the penalty order passed by the A.O u/s 271(1)(c) of the Act levying penalty upon the assessee. See Jolly Highrise Co-op HSG Society Ltd. [2010 (7) TMI 1082 - ITAT MUMBAI] - Decided in favour of assessee
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2015 (12) TMI 1544
Penalty u/s 271E - repayment of fixed deposits of various depositors at various branches of the bank - Held that:- 271E confer discretion on authorities to levy or not to levy penalty and such discretion needs to be exercised with wisdom and in a fare and just manner. Even if the relevant provisions of law prescribe the levy of penalty, it does not mean that penalty must necessarily be imposed in every case falling within the provisions of section 269T. Even if penalties are prescribed the higher authorities will be justified in refusing to impose penalty when there is a technical breach of provisions of the Act
In the present cases, the Department has not doubted the genuineness of the transactions and has imposed & upheld the penalties holding that the reasons for repayment as submitted by assessee did not constitute reasonable cause. We further find that in different years the violation has been made by different branches of the Bank & the violation has not been repeated. In Asst. Year 2008-09, the violation was by Bulbul Nowgam, L.D. Hospital & Islamia College Branches & in Asst. Year 2007-08, the violation was by Lal Mandi Branch whereas in Asst. Year 2005-06, the violation was by Lal Bazar Branch. We further find that learned CIT(A) himself in Asst. Year 2006-07 has deleted the penalty imposed by Assessing Officer under similar facts circumstances. We further find that no mens rea is involved as the violation is not intentional. Therefore, in view of the above facts and circumstances and in view of the legislature intention of introducing these penal provisions & also in view of the precedents relied upon by learned AR, we hold that penalties are not imposable in these cases. - Decided in favour of assessee
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2015 (12) TMI 1543
Unexplained investment u/s 69 or unexplained credit u/s 68 - AO invoked the section 68, made an addition qua unexplained cash credit - whether the ld. CIT(A) has been correct in converting this charge of “unexplained cash credit” u/s 68 of the Act to that of “unexplained investment” u/s 69 of the Act - Held that:- It is not a case of typographical or a mere wrong mention of the Section. However, not able to agree with this observation of the ld. CIT(A). Section 292B of the Act and notification of the particular provisions of the Act to make certain addition is none than the jurisdictional matter going to the very root of the matter. If the provisions invoked are held to be non applicable, the very charge for making the addition does not survive and it cannot be converted to that of another entirely different provision. Therefore, the ld. CIT(A) has evidently erred in applying the provisions of section 69 of the Act, observing that the nature and source of cash deposit of ₹ 12,00,000/- could not be satisfactorily explained with credible or cogent evidence and hence the section of deemed income created by section 69 comes into operation.
Section 69 of the Act talks of clauses where the assessee had made investments which are not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of investments or the explanation offered by him is not, in the opinion of the AO, satisfactory. Section 68 of the Act, on the other hand, concerns the instances where any sum is found credited in the books of the assessee and the source thereof remained unexplained. In the present case, the assessee is not shown to have made any “investment” and, therefore, the provisions of section 69 of the Act are entirely inapplicable. - Decided in favour of assessee.
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2015 (12) TMI 1542
Addition on account of Freight Expenses, Packing Expenses, Power & consumption Expenses, Machinery Expenses and Tools & Consumable Expenses - Held that:- For freight assessee submitted before AO detailed copy of account showing that assessee engaged M/ Swift freight movers as freight forwarders for export shipment and all payments were made by cheques and further Tax deduction at source was also made by appellant. Therefore in our opinion the above facts read together gives complete picture of the freight expenses and to whom it is paid and whether he is assessed to tax and whether such expenses are in relation to export sales. This would have open floodgates of information for the AO to determine whether expenditure incurred by assessee are wholly and exclusively for the business or not. But no such efforts were made. Therefore statement of AO that there is no documentary evidence is produced by assessee before him is a hollow statement. Further the assessment proceedings started with the first notice u/s 143(2) on 18.09.2008 and assessment continued and concluded on 18.12.2009 i.e. almost 14 months , this time period shows that AO has ample time to exercise all the power vested up on him by the Act and gather adequate evidence to make concrete disallowance, if at all any.
The powers bestowed up on assessing officer are very wide and most effective which were used very sparsely in this case. Therefore there is no basis, except statistics, for making contested disallowance in the hands of assessee. In our view this is not sufficient to uphold disallowances. In this back drop, ad hoc disallowance made by AO cannot be sustained and CIT (A) has rightly deleted the same. Therefore we confirm the order of CIT (A) and dismiss the appeal of revenue.
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2015 (12) TMI 1541
Rejection of refund claim - CENVAT Credit availed by appellants did not represent duty of excise - Held that:- The issue is covered by the judgment of the Tribunal in Neuland Laboratories Ltd Vs C C E Hyderabad [2013 (11) TMI 1339 - CESTAT BANGALORE ]. Further that the appeal filed by the Revenue against the said judgment was dismissed by the Hon’ble High Court of Andhra Pradesh upholding the judgment of the Tribunal Commissioner Vs Neuland Laboratories Ltd. (2015 (10) TMI 669 - ANDHRA PRADESH HIGH COURT].
It is not disputed that the appellants purchased the inputs/ethanol from the suppliers. It is also not disputed that the appellants paid duty on the goods. The credit is sought to be denied at the end of the receiving manufacturer on the ground that no duty is payable on the goods. - Decided in favour of assessee.
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2015 (12) TMI 1540
Valuation - works contract service - non-monetary consideration - services provided to landlords for construction services under joint development agreement - waiver of pre-deposit - Held that:- appellant is not the owner of the land on which the construction of apartments was executed by them. The owner(s) of the land were assigned 30 apartments and remaining were disposed off to other individuals under two categories of agreements, outright sale on the one hand and contract for construction of apartments on the other. Prima facie, it would appear that development of the property had been effected by construction of the 42 apartments, which were not handed over to the landowners as the consideration. It would, therefore, appear that the service had been rendered to the land owners for which consideration was not monetary but in the form of apartments for disposal - prima facie case is against the assessee. - stay granted partly.
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2015 (12) TMI 1539
Assessment u/s 153A - Held that:- In the absence of any incriminating material found during search, additions made on the assessed income are unsustainable in law, we are of the considered opinion that the additions made in the instant case are not sustainable and accordingly, we delete the same - Decided in favour of assessee.
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2015 (12) TMI 1538
Reopening of assessment - assessment was reopened on an information received from the ACIT, Central Circle 10, Jhandelwalan Extn., on the allegation that the assessee had made bogus purchases - sustenance of the addition to the extent of 20% of the purchases - Held that:- Reassessment quashed as barred by limitation.
Now coming to the merit about the sustenance of the addition by the CIT(A) @ 20% of the purchases made by the assessee from Shri Bankey Bihari Trading Co., after hearing the rival submissions and going through the order of the Tribunal in Shree Radheshyam & Company [2015 (11) TMI 1537 - ITAT DELHI]deleted similar addition having held that tax has to be levied on real income and the profit cannot be ascertained without deducting the cost of purchases from the sales as otherwise it amount to levy of tax on gross receipt, she ought to have applied' profit rate in this nature of trade. Estimating profit at the rate of 20% by taking into consideration the or visions of section 40A(3) will not lead to determination of correct real income. Section 40A(3) is meant for a different purpose when the assessee has made purchases in cash. This provision cannot be applied in such cases. Once the purchases are held to be bogus then the trading results declared by the assessee cannot be accepted and right course in such case is to reject books of accounts and profit has to be estimated by applying a comparative profit rate in the same trade. Though there can be a little guess work in estimating profit rate but such profit rate cannot be punitive.
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2015 (12) TMI 1537
Levy of penalty u/s 271C - non deducting the tax at source - assessee treated as 'assessee in default' - Held that:- We find that the assessee has not been treated as an “assessee in default” as per section 201 of the Act and is therefore neither liable to deduct nor pay any tax as per Chapter XVII B. In such circumstances, we find that the question of levy of penalty u/s 271C, does not arise. This view has been upheld in the case of ACIT Vs. M/s Good Health Plan Limited [2014 (1) TMI 1233 - ITAT HYDERABAD ] wherein penalty levied u/s 271 C was deleted since the assessee was not held to be an assessee in default.
The tax on the impugned sums had been reimbursed to PGCIL has not been controverted by the Revenue. In such circumstances the belief harboured by the assessee that by deducting further TDS, it would tantamount to double taxation, appears to be a reasonable and bonafide belie
No merit in the contention of the Ld. DR that the assessee had no reasonable cause for not deducting tax at source. Further we hold that in lieu of the provisions of section 273B which states that no penalty shall be leviable in cases where reasonable cause for the default committed has been demonstrated, the penalty levied u/s 271C is liable to be deleted. - Decided in favour of assessee
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2015 (12) TMI 1536
TDS u/s 194A - Disallowance made under section 40(a)(ia) - interest paid to Chatrapati Sambhaji Maharaj Patasanstha Limited - Held that:- 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.
The issue raised in the present appeals is squarely covered by the order of Tribunal in Bhavook Chandraprakash Tripathi (2015 (3) TMI 803 - ITAT PUNE ) and following the same parity of reasoning, 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 (supra), the Assessing Officer is directed to adjudicate the issue in accordance with law after affording reasonable opportunity of hearing to the assessee.
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2015 (12) TMI 1535
Refund claim - Held that:- As informed that the refund, consequent upon the appeal effect along with interest, in accordance with law, has been processed and the same shall be paid to the petitioner within two weeks.
We are granting liberty to the petitioner to approach this Court in case the refund is not so granted.
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2015 (12) TMI 1534
Benefit of input tax credit (ITC) on Packing material - finished goods were stock transferred - High Court held that appellant is not entitled to the benefit of ITC in respect of packing materials used for its finished goods, which were stock transferred. Even the Circular of 2008, does not as such clearly provide for the grant of such benefit. Lack of clarity and place for doubt in a stray sentence in a Circular cannot be seized upon by the appellant to claim that, contrary to the clear mandate of the Legislature, it should be given the benefit of ITC for the years 2008-2009, 2009-2010 and 2010-2011 reported in [2015 (10) TMI 290 - UTTARAKHAND HIGH COURT] - Apex Court dismissed the Special Leave Petitions
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2015 (12) TMI 1533
TDS u/s 194J - tds liability - Held that:- There is no mention of any offer with regard to any “technical services” by the KPTCL. Plain and simple intention of the parties to the agreement as discernable from the power transmission agreement is that the assessee was desirous of using the transmission network belonging to the KPTCL in accordance with the provisions of the Electricity Act subject to payment of charges applicable and determined by KERC.
KPTCL was willing to provide its transmission network for the purpose of carrying electricity to its users subject to payment of transmission and other charges as determined by KERC. There is neither an offer nor an acceptance of any “technical service” inter se between the parties. Admittedly, KPTCL is a State owned Company and the only power transmitting agency. It has installed and developed its own infrastructure. Assessee is also a State owned electricity distribution company. The only service which the assessee has availed from the KPTCL is “transmission of power” on payment of charges fixed by KERC. No material is placed by the Revenue before this Court to substantiate its contention that assessee had availed of any technical services. In our considered view, assessee has done nothing more than transmitting certain quantum of power from one place to the other for a price fixed by KERC. Assessee was oblivious to the technical expertise which the KPTCL may possess. There was neither transfer of any technology nor any service attributable to a technical service offered by the KPTCL and accepted by the assessee. Therefore, application of Section 194J of the Act to the facts of this case by the Revenue is misconceived. - Decided against revenue
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2015 (12) TMI 1532
Deduction under section 36(1)(vii) in respect of provisions for bad and doubtful debts - Held that:- The SC in the case of Vijya Bank vs. CIT [2010 (4) TMI 46 - SUPREME COURT ] has held that the provision for bad and doubtful debts is allowable as deduction in as much as what is necessary is to write off to P & L A/c and it is not necessary to credit the debtors account. Thus we deem it appropriate to remit this issue back to the Assessing Officer for deciding afresh in the light of the decision rendered above - Decided in favour of assessee for statistical purposes.
Exemption under section 10(33) in respect of dividend income on Master shares and other units of Unit Trust of India ('UTI) - Held that:- The dividend received on various units of UTI by the assessee cannot be equated with the dividend earned on shares of a company. Accordingly, this ground of appeal of the assessee is dismissed.
Computation of relief under Section 80HHC - Held that:- The issue has already decided against the assessee by the Tribunal in the assessment year 1997-98
Amount received as rent from Sai Service has been reduced twice - said amount has been shown twice, in miscellaneous income and as well as separately as rent from Sai Service - Held that:- We deem it appropriate to remit this issue back to Assessing Officer for limited purpose of verification. If the amount has been deducted twice the necessary correction may be carried out to deduct the aforesaid amount only once
Addition of interest income paid to Incometax Department - Held that:- The issue relating to interest income paid to the Department has been decided against the assessee by the Tribunal in assessee’s own case for previous assessemnt year
Deduction under Section 37(1) of the Act in respect of lump sum know how fees - Held that:- In view of introduction of provisions of section 35AB of the Act which were inserted by the Finance Act, 1985 w.e.f. 01.04.1986, we are of the view that in cases of payment of lump sum consideration for acquiring technical know-how, the provisions of section 35AB of the Act are attracted and the expenditure is not allowable under section 37(1) of the Act, which is general provision and specifically excludes expenditure covered under sections 30 to 36 of the Act. Consequently, the said expenditure is to be amortized under section 35AB of the Act and cannot be allowed as a deduction in the year in which the liability to pay the said amount accrues. The Hon’ble Supreme Court in Drilcos (India) (P.) Ltd. Vs. CIT (supra) had held that after insertion of section 35AB of the Act, where the expenditure is to be used in business of assessee, section 35AB of the Act would come into play and the provisions of section 37(1) of the Act are not applicable for units established prior to 01.04.1998.Following the same parity of reasoning, we hold that provisions of section 35AB of the Act are to be applied to the lump sum consideration paid for acquisition of technical know-how by the assessee.
Deduction under Section 37(1) of the Act on account of exchange fluctuation loss - Held that:- We are of the view that if the exchange fluctuation loss has been wrongly computed, the same has to be reworked. We deem it appropriate to restore this issue back to the file of Assessing Officer for re-computing exchange fluctuation loss and arrive at the correct amount of deduction u/s. 37(1) of the Act.
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2015 (12) TMI 1531
Allowable for deduction u/s 80IA - whether the restriction of “derived from” contained in sub-section (1) cannot be read into the provision of sub-section (2A) of section 80-IA? - Held that:- The provisions cannot be taken in an isolated or detached manner dissociated from the context where the “referents” i.e. the business undertakings or enterprises to whom it is said provisions are to be applied are clearly specified and distinguishable from one another. Yet, it is necessary to determine first whether the language used is plain or ambiguous for which purpose the provisions of section 80-IA would be required to be read as a whole. Ambiguity could be said to arise only where a provision contains a word or phrase which, in the particulars context, is capable of having more than one meaning.
On a reading of sub-section (1) of section 80-IA, we find that the legislature specifically uses the words meaning and import of which is plain and unambiguous in the context it is to be construed. Deduction under section 80- IA in terms of sub-section (1) is available to “gross total income” of an assessee where “gross total income” is restricted to “profits and gains derived by OR from any business referred to in sub-section (4)”. The deduction is available of an . amount equal to hundred percent of the profits and gains derived from such business for ten consecutive assessment years” subject to the provisions of the section. The meaning and intention of the legislature has been legally settled and well understood to mean that only those profits come under the ambit which can be said to be “derived from” such business. The intention of the legislature on a plain reading of the said sub-section is loud and clear. Reference to the decisions which establish a nexus of the first degree at this stage is refrained from as the position is well-settled legally and at this stage is not an issue for consideration in the present proceedings as both the parties agree that sub-section (1) of section 80-IA envisages only first degree nexus for the purposes of claiming deduction. The fact that deduction is available to hundred percent of the profits for a period of ten consecutive years is also not an issue under debate and even otherwise we find that the above provision in the said extent is clear and unambiguous.
What we may take note of is that on reading of only this sub-section in isolation what emanates clearly is that the deduction is applicable to any undertaking or an enterprise from any business referred to in sub-section (4) of section 80-IA which the legislature describes as “eligible business”. The said sub-section sets out in unequivocal terms that the deduction is available to the gross total income of such undertaking/enterprise which “includes” “profits and gains derived from” such business. The meaning and limits of first degree nexus of the said phrase is well-understood by the tax payer, the tax collector and the Legislature. The said sub-section also sets out the period and extent of deduction available as hundred percent for ten years.
The fact that the restrictions placed on the eligible business by sub-section (1) of section 80-IA shall continue to be read into sub-section (2) of section 80-IA is made clear in the opening words of sub-section (2) itself and as observed in the earlier part of this order is not in doubt and the restrictions of “derived from” have not been diluted either in sub-section (2) or in the proviso to sub-section (2) of section 80-IA. Accordingly it is seen that the “referent business” i.e. the undertakings or enterprises covered under the proviso, have been enabled to exercise their option for claiming deductions for ten consecutive years from a period of twenty years.
The said term by itself would have been sufficient and complete to convey the legislative intent that whatever may have been said in sub-section (1) and (2) but the legislature has not rested there and has taken care to qualify the word with the all encompassing, all inclusive, well understood word “anything” contained in sub-section (1) or (2). The meaning, use and import of the said word does not lead to any confusion or ambiguity. Thus prima-facie to our understanding when considering the para phrasing used by the legislature in its plain and literal meaning there cannot be any doubt about what the intention of the legislature is as it is loud and clear in stating that while considering and deciding the intent of sub-section (2A) the mandate of sub-sections (1) and Sub-section (2) are not required to be imported in respect of the referent undertaking or enterprises providing telecommunication services.
The dispute of bringing sub-section (1) into play for a tax payer falling in sub-section (2A) of section 80-IA to our minds cannot arise. According to the assessee sub-section (2A) does not put the restriction contemplated in sub-section (1) of section 80-IA in the face of the non-obstante clause coupled with the specific omission to use the well understood term “derived from”. This argument is notwithstanding the argument that considering the assessee’s nature of business the direct nexus presumed by sub-section (1) of section 80-IA is also fulfilled. On a careful reading of the above provisions, we find that the legislature has left no ambiguity in the wording of the sub-section (2A). Having started with the non-obstante clause in sub-section (2A) which over-rides the mandate of sub-section (1) and (2), the legislature is well aware that the phrase “derived from” has been used only in sub-section (1). The meaning of the said terms is judicially well-accepted and understood and it is not the case of that Revenue that the legislature was not conscious of the said term. It is seen that the import of this term continues to exist for an assessee covered under subsection (2) of section 80-IA. The legislature has consciously retained it for enterprise/undertaking falling in sub-section (2) and the proviso thereto only keeping in mind the nature of the enterprises/undertakings contemplated under sub-section (2) the option of claiming deduction in any ten consecutive years is given to be claimed from the first fifteen years of beginning operation is given.
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2015 (12) TMI 1530
Issue of notice - Held that:- Insofar as the assessment year 2015-16 is concerned, there is no notice under Section 143(2) of the Income Tax Act, 1961, which has been issued to the petitioner/assessee till date.
In these circumstances, the return for the assessment year 2015-16 ought to be processed at the earliest. Insofar as the other assessment years are concerned, the assessment proceedings be expedited and we hope that before the next date of hearing, the assessment orders are passed insofar as the assessment years 2013-14 to 2014-15 are concerned.
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2015 (12) TMI 1529
Deemed dividend u/s 2(22)(e) - whether the debit balance and the accumulated profits in the books of accounts of the company in the name of the assessee in the company’s books, is a loan or deposit which attracts provisions of section 2(22)( e) or which is merely a sale advance? - Held that:- We are of the opinion that the assessee is trying to circumvent the loan taken by her from the company by creating the sale agreement. On perusal of the sale agreement, we noticed that one of the condition of sale agreement is that the sale should be completed within one year from date of the sale agreement. The assessee could not adduce any reason for not completing the sale. It is quite unusual that agreement of sale has been prepared on stamp paper which was purchased almost two years back.
Further, there is nothing in the company’s books to indicate that any such transaction has been taken during the relevant financial year under consideration. The assessee is continuing to enjoy the benefits of the property by getting rent from the company. The assesse contention is that the property is given as collateral security to bank to avail the loan for the company business purpose. But, from this fact alone we cannot come to the conclusion that the company is having the possession of the property and the assessee has entered into a sale agreement. Therefore, in our opinion, the assessee is trying to circumvent the alleged loan and advances by furnishing an unregistered sale agreement, which was later not acted upon by both the parties even now. Hence, we hold that the A.O. is right in treating the loan received by the assessee as deemed dividend under the provisions of section 2(22)(e) of the Act. The CIT(A) has considered the issue elaborately and upheld the additions made by the A.O. - Decided against assessee.
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