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Showing 441 to 460 of 19685 Records
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2015 (12) TMI 1468
Reopening of assessment - Held that:- The facts as revealed from the original record relating to the proceedings as recorded hereinabove, make it amply clear that insofar as the first respondent - Assessing Officer is concerned, he has, in the communications referred to hereinabove, given a clear opinion that no case has been made out for reopening of the assessment and that the objection raised by the Audit was not acceptable. However, it is only on account of the persistence of the Audit Department, that the Assessing Officer has reopened the assessment for the assessment year under consideration by issuing notice under section 148 of the Act. Clearly, therefore, the Assessing Officer has not formed any belief that income chargeable to tax has escaped assessment and on the contrary, is of the opinion that there is no cause for reopening the assessment; however, he has sought to reopen assessment only upon the insistence of the Audit Department. Under the circumstances, the primary requirement for reopening the assessment under section 147 of the Act, namely that the Assessing Officer should have reason to believe that income chargeable to tax has escaped assessment has clearly not been satisfied. The assumption of jurisdiction on the part of the Assessing Officer by reopening assessment for the year under consideration by issuance of notice under section 148 of the Act is, therefore, without any authority of law. Resultantly, the impugned notice under section 148 of the Act cannot be sustained. - Decided in favour of assessee.
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2015 (12) TMI 1467
Disallowance u/s 40A(2)(b) - payment of sale value was in excess of the fair market value - related parties - Held that:- Section 40A(2)(a) of the Act provides that where the assessee incurs expenditure in respect of which payment has been made to any person referred to in clause (b) of that sub-section, and the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefits derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction. Therefore, for the purpose of disallowing a deduction, the Assessing Officer has to form an opinion not only that the expenditure is excessive or unreasonable, but that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made. As noticed hereinabove, the Commissioner (Appeals) has recorded a categorical finding of fact to the effect that the Assessing Officer has not brought any material on record to show that the payments in question exceeded the fair value of the services received. Insofar as the legitimate needs of such services etc. is concerned, the Commissioner (Appeals) has found as the matter of fact that as a result of utilising the employees of its sister concerns and on payment of service charges, the assessee company started making operational profits from assessment year 2001-02. Under the circumstances, it cannot be said that the services were not availed for any legitimate need. The Tribunal has concurred with the aforesaid findings of fact recorded by the Commissioner (Appeals). Essentially, therefore, the conclusion arrived at by the Tribunal is based upon findings of fact to the effect that there is no material to show that the payments made exceed the fair market value and that the services have been availed for legitimate needs of the assessee company. On behalf of the appellant nothing has been pointed out to show that the Tribunal has placed reliance upon any irrelevant material or that any relevant material has been ignored. No contrary material has been brought to the notice of the court so as to dislodge the findings of fact recorded by the Tribunal. Under the circumstances, the conclusions arrived at by the Tribunal being based upon findings of facts recorded by it after appreciating the evidence on record.- Decided against revenue
Depreciation on goodwill - ITAT allowed claim - Held that:- Section 32 of the Act provides for the deductions to be allowed in respect of depreciation of - (a) buildings, machinery, plant or furniture, being tangible assets; and (b) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets being acquired on or after the 1st day of April, 1998. Explanation 3 to section 32 provides that for the purposes of that sub-section, the expressions “assets” and “block of assets” shall mean (a) tangible assets, being buildings, machinery, plant or furniture; (b)intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature. (a) While goodwill has not been specifically mentioned in the category of intangible assets under clause (b), in the case of CIT v. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT ] has held that goodwill is an asset under Explanation 3(b) to section 32(1) of the Act. Under the circumstances, the controversy raised vide the second proposed question clearly stands concluded by the above decision. The Tribunal, therefore, did not commit any error in following the said decision. - Decided against revenue
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2015 (12) TMI 1466
Block assessment - Benefit of telescoping relating to cash actually found during the course of search - promissory note found during search - undisclosed income of the assessee - ITAT deleted addition - Held that:- All that has been done by the Commissioner (Appeals) is that the benefit of telescoping has been given to the assessee in relation to the cash that was actually found during the course of search, which view has been confirmed by the Tribunal. This court in the case of Commissioner of Income Tax, Gandhinagar v. Jagatkumar Satishbhai Patel (2012 (12) TMI 1017 - GUJARAT HIGH COURT) has held that applying the principles of telescoping does not give rise to a question of law. Under the circumstances, the impugned order passed by the Tribunal confirming the order of the Commissioner (Appeals) granting the benefit of telescoping to the assessee does not give rise to any question of law, much less, any substantial question warranting interference. - Decided against revenue.
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2015 (12) TMI 1465
Disallowance of interest paid to various parties invoking the provisions of section 40(a)(ia) - assessee had belatedly filed form 15G before the Ld.A.O and also before the Ld. CIT. - Held that:- From the facts of the case, it appears that the assessee had filed the Form 15G belatedly before the Ld. A.O except from two individuals. Since there were defect in the Form 15G because the same was undated, the Ld. Assessing Officer as well as the Ld. CIT disallowed the interest expenses claimed by the assessee by invoking the provisions of section 40(a)(ia) of the Act. The assessee has relied in the decision of the Jurisdictional High Court in the case of Vijay Hemant Finance & Estates Ltd.,[1999 (4) TMI 65 - MADRAS High Court ] which is identical to the case of the assessee wherein the Hon’ble High Court remitted the matter back to the file of Ld. Assessing Officer for providing an opportunity to the assessee to rectify the defects in the Form 15H.
Following the aforesaid decision of the Hon’ble Jurisdictional High Court, we also hereby remit the matter back to the file of Ld. Assessing Officer with similar direction. - Decided in favour of assessee for statistical purposes.
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2015 (12) TMI 1464
Transfer pricing adjustments - Working capital adjustment to be made while working out the Profit Level Indicator (PLI) - Held that:- To bring the uncontrolled transaction comparable to the transactions of an assessee, it is required to eliminate the material differences which are likely to affect the price or cost or profits arising from the transactions. Assessee had given a detailed working capital study of the twelve comparables selected by it and worked-out the average working capital and the ratio of the average working capital to sales of such comparables. There is no case for the Revenue that the comparables considered were not carrying debtors, inventories and creditors. When assessee was not having any debtors and was entirely funded by advance received from AE abroad against supplies, then in order to bring parity between the results of the selected comparables and that of the assessee it is essential that adjustment for the working capital is made on the results of such comparables. Only then can the uncontrolled transaction become comparable to the international transactions of the assessee. In such a situation we are of the view that DRP was correct in giving the direction to the AO to carry out the necessary working capital adjustment in working out the average PLI of the comparables. We do not find any reason to interfere with the order of the DRP. - Decided against revenue
Exchange loss / gain - treated as operating in nature for working out the PLI of the assessee - whether there was any nexus between foreign exchange loss / gain with the business activity of the assessee? - Held that:- Financial results of the assessee showed that its earnings from export on granite slabs to AE were ₹ 15,55,02,752/-. In our opinion, given this fact situation, foreign exchange gain / loss could have been considered as non-operational only if the AO could show that such gains / loss came out of hedging and transactions which were independent of the business revenue earning transaction of the assessee. The preponderance of probability will always weigh in favour of the assessee when its revenues are only from exports. In such a situation we cannot take a presumption that foreign exchange gain / loss were not having any nexus to the operations of the assessee - Decided against revenue
Adjustment for under utilisation of rated capacity not allowed while comparing its results with that of the comparables selected for the TP study - Held that:- Depreciation on fixed assets need not be directly proportional to utilisation of machinery. Assets can get depreciated by non usage as well. Hence attempt of the assessee to have a lesser charge of depreciation while working out its PLI in the guise of under utilisation of capacity, in our opinion, was not correct. No doubt, as mentioned by the Ld. AR, Rule 10B(1)(e) requires adjustment of differences between international transactions and the comparable uncontrolled transactions which would materially affect the net material margin. However, assessee here was unable to establish that the comparables had claimed depreciation after considering their capacity utilisation. Further assessee also could not establish the existence of a linear relationship between its depreciation cost and machine utilisation. - Decided against assessee
Addition for the working capital adjustment - Held that:- Assessee has produced before us a chart according to which the average working capital adjustment that was required to be done for working out the average PLI of the comparables was (-) 2.85%. TPO had however added 2.85% to the unadjusted average PLI of the comparables. We are of the opinion that this issue also requires a fresh look by the AO / TPO. If the working capital adjustment was negative, AO / TPO should rework the adjusted PLI of the comparables after reducing the quantum of such adjustment from the average PLI of the comparables. Ordered accordingly. - Decided in favour of assessee for statistical purpose.
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2015 (12) TMI 1463
Penalty under section 271(1)(c) - disallowance/expenditure, namely, (i) claim of depreciation under block "buildings" ; (ii) loss on sale of current assets ; (iii) claim of bad debts ; (iv) investments written off ; (v) irrecoverable project expenses written off, on the ground that the assessee has furnished inaccurate particulars of income - Held that:- Other than the claim made by the assessee with regard to five items of deduction, namely, claim of depreciation under block buildings, loss on sale of current assets, claim of bad debts, investments written off and irrecoverable project expenses written off, no fault has been found by the Assessing Officer in the particulars of income submitted by the assessee in its return. Therefore, this Tribunal is of the considered opinion that merely because the claim of the assessee was found to be not sustainable in law by the Assessing Officer, that cannot be a reason to say that the assessee has furnished any inaccurate particulars regarding its income. This Tribunal is of the considered opinion that the assessee has not furnished any inaccurate particulars regarding its income. In view of the judgment of the apex court in CIT v. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] the assessee cannot be by any stretch of imagination construed as to have furnished any inaccurate particulars of income. - Decided in favour of assessee
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2015 (12) TMI 1462
Unexplained share application money - Addition u/s 68 - What is burden of proof? - Held that:- CIT (A) has relied on the audited balance sheet for the FY 2007-08 i.e. AY 2008-09 and the copy of the ITR of AY 2009-10 to uphold that the share applicant / investor companies are existing companies and the audited balance sheet show that the share applicants companies had enough paid up capitals and reserves to subscribe for the shares from the assessee’s company. Though we find that cheque numbers which are dated between 10.08.2006 to 25.08.2006 have been mentioned by the ld. CIT (A) to uphold the genuineness of the transaction, however, we are unable to accept the said reasoning and finding of ld. CIT (A) because the assessee failed to prove the identity of the share applicants by adducing evidences of their existence at the addresses or by cogent materials before the AO.
The PAN details were wrong. The transactions from the bank which were claimed to have transacted the share application money has been found to be bogus and even during the remand proceedings, the assessee failed to produce even a single share applicant before the AO. In the said scenario, the ld. CIT (A) accepting the audited balance sheet for FY 2007-08 i.e. AY 2008- 09 which is subsequent assessment year is not acceptable. The assessee cannot say that it did not had sufficient time to discharge its burden in respect to the share capital money which has come to its account. We find that the AO had investigated the matter fairly and had given enough opportunities to the assessee to come clean with the identity, creditworthiness and genuineness of the transaction. We find that the AO had given sufficient notice and furnished the enquiry reports to the assessee at various stages to show that he was not satisfied with the documents filed by the assessee before the AO. The AO has disproved the evidences brought by the assessee to discharge its burden of proof, which show that the assessee failed to discharge its burden of proof in respect to share application money which has come into its account. The CIT (A) erred in taking the audited balance sheet of subsequent assessment year and documents to prove the creditworthiness which was filed before him to prove the existence of the said companies and individuals.
The case laws relied upon by the ld. AR as aforestated pertains to cases where public issue of shares are involved and the case laws regarding share subscription of Public Limited company stands on a different footing than the share application money in the context of private limited company and, therefore, the case laws relied on by the ld. AR does not apply to the case in hand.
We would like to deal with the plea of the ld. AR that in case of any doubt regarding the impugned order, the matter may be remanded, if necessary, back to the AO then the AO can satisfy himself about the identity, creditworthiness and genuineness of the transaction as found by the ld. CIT (A). This prayer cannot be granted for the simple reason that lot of water has flown the Ganges after the impugned assessment order. Lot of developments have taken place after the addition of ₹ 3.46 crores u/s 68 of the Act. We find that the defunct companies at the time of assessment, as pointed out by the AO, have resurrected back to life after statutory compliances were fulfilled; and the said documents were furnished before the ld. CIT (A) who has erred in relying upon it to delete the addition. So, therefore, we cannot allow such a prayer of the assessee for the simple reason that the AO had demolished the case of the assessee to prove the identity, creditworthiness and genuineness of the alleged shareholders. So we are not inclined to send the case back to the AO again for fresh adjudication - Decided against assessee
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2015 (12) TMI 1461
Penalty levied u/s 271(1)(c) - receipt of interest income - Held that:- So far as the offer of interest income under the head "business income" after netting the said income against the financial charged incurred for the purposes of business, nothing is brought on record that there is any furnishing of inaccurate particulars. It is a case of change of head of income and the CIT (A) attempted to tax it u/s 56 of the Act. In our opinion, the issue is debatable in nature, and there is no default of disclosure or furnishing of inaccurate particulars in this case relating to this issue. We have also perused the cited judgment of the Hon‟ble jurisdictional High Court in the case of Bennet Coleman & Co Ltd (supra) and find the said decision supports the arguments of the Ld Counsel for the assessee. Therefore, we are of the considered opinion that this particular addition does not invite levy of any penalty u/s 271(1)(c) of the Act. - Decided in favour of assessee
Pre-ponment of sales offered in next year - Held that:- The assessee offered the said income in the later assessment year basing on the principle "pay as you earn". This principle is upheld by the Hon‟ble Supreme Court in the case of Excel Industires (2013 (10) TMI 324 - SUPREME COURT ) wherein it is held that the income tax cannot be levied on hypothetical income. Income accrued when it becomes due at the same time, it must also be accompanied by corresponding liability of other party to pay the amount. Only then, it can be said for the purpose of taxability that the income is not hypothetical and it has really accrued to the assessee. In the instant case, the liability to pay by the other parties is crystallized in the AY 2010-2011 not in the AY 2009-2010. But the CIT (A) insists the same would be taxable in the year under consideration. In our opinion, such additions, in principle, are unsustainable in law considering the said binding judgment. If some of the reasons, such additions are accepted by the assessee, the same will not attract penalty u/s 271(1)(c) of the Act as the said amount was already offered to tax by the assessee. In our opinion, there is neither concealment of income nor furnishing of any inaccurate particulars in such matters.- Decided in favour of assessee
Addition based on the estimated total cost of construction for the project - Held that:- We find that there is no dispute on the fact that the total estimated cost of the project is 1628.02 Crs. There is no fact based reasons for the CIT (A) to adopt the sum of ₹ 1425.19 Crs as an actual expenditure spent on the project till the end of AY 2012-2013, the year of completion of project. Rest of the calculations made by the CIT (A) is directly related to the change in the method of accounting rejecting the assessee‟s figures and the methods in this regard. What is the better method of accounting is a matter of debate and no concealment of penalty should be attracted to such debatable issues. We find the addition of ₹ 28.62 Crs has the genesis in the estimations on one side and preponement on the other and also on the change of method of accounting. In our opinion, penalty cannot be levied on such additions as they constitute debatable issues. It is an undisputed fact that the said profits of the project are subject to tax in the AY 2009-2010 or in AY 2012-2013. It is a matter of dispute. The above citations were also perused and we find they are relevant for the proposition that change in the method of accounting involving the estimates do not attract the penalty u/s 271(1)(c) of the Act. Therefore, we are of the opinion that the penalty levied by the AO on the said addition of ₹ 28.62 Crs is unsustainable in law. - Decided in favour of assessee
Income of the project resultant of the calculations based on change of method of accounting - Held that:- Considering one of the methods of accounting for determining the profits of the project adopted by the CIT (A) is not free from the debate or dispute. It is also a settled issue that when debate is an integral part of any addition, the concealment penalties will not survive. The decisions relied upon by the Ld Counsel for the assessee were also perused and found supporting to his arguments. On such facts, whether the assessee appealed against the additions or not in quantum proceedings, we are of the opinion that the penalty levied by the AO is unsustainable and therefore, we order the AO to delete the penalty accordingly. - Decided in favour of assessee
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2015 (12) TMI 1460
Registration under section 12AA - CIT(A) refused to grant registration on the ground that the application of the assessee is not accompanied with the accounts of the society for the period ending March 31, 2014 - Held that:- We do not agree with the view of the learned Commissioner of Income-tax (Exemptions). As rightly argued by the learned authorised representative that at the time of registration the learned Commissioner of Income-tax (Exemptions) has to only look into the objects of the trust and if it found appropriate grant of registration under the provisions of the Act. Therefore in the case of the assessee, the learned Commissioner of Income-tax (Exemptions) ought to have examined the objects of the trust and decide the issue on its merits as per law. Moreover, the assessee-trust is in incubation stage and yet to commence its activities. At this juncture it is premature to determine the genuineness of the trust by seeking its statement of accounts. Therefore we hereby remit back the matter to the file of the learned Commissioner of Income-tax (Exemptions) to consider the objects of the trust and pass appropriate order as per merits and law. - Decided in favour of assessee for statistical purposes.
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2015 (12) TMI 1459
Addition as undisclosed income in respect of commission expenses treated as non-genuine - Held that:- Assessing Officer has made addition purely on the basis of statement made during the course of survey under section 133A, which was later on retracted by the assessee, therefore, we are of the considered view that any addition made on the basis of these statements is without any basis and deserves to be deleted as there is no corroborative materials on record. It seems that addition has been made merely on the basis of statement/presumptive basis and no corroborative material has been brought on record. Presumption cannot take the shape of evidence, however, strong it may be. It is also noted that the statement on oath, claimed to be recorded from Shri Kiran Wasudeo Somalwar neither bears the signature of the deponent nor of any officer, thus, in our view, its evidentiary value is also under cloud - Decided in favour of assessee.
Disallowance of transportation expenses under section 40(a)(ia) - appellant has not deducted tax at source from such payments - Held that:- The transportation expenses on which no TDS has been stated to be deductible and also the transportation charges stands paid before March 31, 2006. However, the issue is being restored back to the file of the Assessing Officer to verify the claim of the assessee whether the amount was paid or payable at the end of the year and if the amount is found to be paid then it has to be allowed in the light of the aforesaid decision from hon'ble Allahabad High Court in the case of CIT v. Vector Shipping Services P. Ltd. [2013 (7) TMI 622 - ALLAHABAD HIGH COURT]. - Decided in favour of assessee for statistical purposes.
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2015 (12) TMI 1458
Unaccounted loan - Assessing Officer found that the gift portion of ₹ 5 lakhs is a separate one and it cannot be linked to the loan portion of ₹ 7 lakhs which was said to be given during the assessment year 2007-08 - Held that:- The fact remains that the total sum of money given by the assessee to his son is only ₹ 12 lakhs. ₹ 5 lakhs was given in the assessment year 2006-07 and another sum of ₹ 7 lakhs was given in assessment year 2007-08. The Assessing Officer appears to have accepted the gift of ₹ 5 lakhs. However, he confuses himself that the loan of ₹ 5 lakhs is a separate one and he made an addition with regard to loan and not with regard to gift. The fact remains is that for the assessment year 2006-07, what was given by the assessee is only a sum of ₹ 5 lakhs either as loan or gift to his son Shri R. Ganesan. Therefore, there is no necessity for the Assessing Officer to take the transaction as two independent transactions. This Tribunal is of the considered opinion that the transaction of ₹ 5 lakhs is only one transaction. Therefore, the Assessing Officer may not be justified in treating the transaction between the assessee and his son in the assessment year 2006-07 as two transactions and making an addition of ₹ 5 lakhs. Since the transaction is only one transaction, this Tribunal is of the considered opinion that the addition made by the Assessing Officer to the extent of ₹ 5 lakhs is not justified. Accordingly, the orders of the lower authorities are set aside and the addition made by the Assessing Officer stands deleted.
Coming to the assessment year 2007-08, reading of the assessment order clearly shows that the assessee and his son categorically admitted that payment and receipt of loan was to the extent of ₹ 7 lakhs. The Assessing Officer appears to have presumed that the sum of ₹ 7 lakhs would not have been repaid during the year under consideration, since neither the assessee nor the assessee’s son claimed before him that the same was repaid. This Tribunal is of the considered opinion that when the loan transaction was confirmed and they claimed that it is not reflected in the statement because the transaction was settled during the same financial year, the presumption of the Assessing Officer was that the loan transaction was not settled during the year under consideration. Therefore, the presumption of the Assessing Officer that there was no claim either by the assessee or by his son that the loan was repaid during the year under consideration is beyond imagination. This Tribunal is of the considered opinion that there is no justification in making addition of ₹ 7 lakhs. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to delete the addition of ₹ 7 lakhs made for the assessment year 2007-08. - Decided in favour of assessee.
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2015 (12) TMI 1457
Penalty u/s. 271(1)(c) - as per revenue assessee had furnished inaccurate particulars with respect to sale of property at Igatpuri - AO invoked the provisions of section 50C for determining Long Term Capital Gain - Held that:- the addition has been made by invoking the provisions of section 50C. It is a well settled law that penalty cannot be levied on the additions based on assumptions, estimations and by invoking deeming provisions. It is an undisputed fact that the assessee has disclosed the sale transaction of land in his return of income and has even computed Long Term Capital Gain thereon. The assessee had computed Long Term Capital Gain on the basis of sale consideration stated in sale deed, whereas, the Assessing Officer has determined Long Term Capital Gain on the basis of valuation certificate submitted by the assessee for the year 2010. The addition has been made by invoking deeming provisions of section 50C. In our considered view in assessment proceedings the provisions u/s. 50C can be invoked for making addition, however penalty cannot be levied on the basis of such deeming provisions. The Department cannot presume that there is a concealment or inaccurate particulars are furnished. There must be independent finding. Once, the assessee has furnished the explanation, the onus shifts on the Revenue to prove that the explanation furnished by assessee is wrong. We observe that the Revenue has not discharged the onus in proving that the sale consideration stated in the sale deed is wrong. Therefore, in the facts of the case, we are of the view that penalty u/s. 271(1)(c) cannot be levied on such additions even if admitted by the assessee in quantum proceedings. - Decided in favour of assessee.
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2015 (12) TMI 1456
Disallowance u/s.14A - CIT(A) deleted the addition on the ground that provisions of section 14A r.w.Rule 8D are not applicable to dividend income on shares held as stock in trade - Held that:- As decided in case of Kunal Polymers Pvt. Ltd. [2015 (10) TMI 2373 - ITAT PUNE ] it is an undisputed fact that the shares are held by the assessee as stock-in-trade. The assessee has earned dividend income on such shares. The assessee has not held the shares for earning dividend income. Dividend income is incidental to the share trading business of the assessee. Thus, no disallowance u/s. 14A is warranted on dividend earned on shares held as stock-in-trade. Our view is fortified by the decision of Mumbai Bench of the Tribunal in the case of DCIT Vs. M/s. India Advantage Securities Ltd. [2012 (11) TMI 458 - ITAT, MUMBAI]. Also see CCI Ltd. Versus Joint Commissioner of Income-tax [2012 (4) TMI 282 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2015 (12) TMI 1455
Allowance of claim of exemption u/s 10(30) - CIT(A) directing the ld. AO to verify the certificate issued by the Tea Board for the subsidy paid to the assessee - Held that:- We have heard the ld. AR on this issue and held that in the interest of justice and fair play, this issue be restored to the file of the ld. AO to verify the certificate from Tea Board for the subsidies paid to the assessee during the assessment year under appeal and direct the ld. AO to grant exemption u/s 10(30) of the Act only to the extent of subsidies received during the year subject to production of certificate from Tea Board. Decided in favour of revenue for statistical purposes.
Addition employees’ contribution to Provident Fund (P.F.) - CIT(A) deleted the addition - Held that:- This issue is directly covered in favour of the assessee by the decision of the Hon’ble Apex Court in the case of Vinay Cement reported in (2007 (3) TMI 346 - Supreme Court of India) wherein it has been held that statutory items like Provident Fund and ESI, if paid before the due date of filing the return of income have to be allowed irrespective of the fact whether the contributions related to the employee and employer. However, we are not able to verify from the materials available on record as to whether the provident fund remittances were indeed made before the due date of filing the return of income by the assessee. Accordingly, we set aside this issue to the file of the ld. AO with the direction to verify the dates of remittance and if the same is paid before the due date of filing of return of income, the deduction should be granted to the assessee - Decided in favour of revenue for statistical purposes.
Deduction towards cess on green leaf - CIT(A) allowed claim - Held that:- This issue is squarely covered by the decision of the Hon’ble Calcutta High Court in the case of CIT vs AFT Industries Ltd. reported in ( 2004 (7) TMI 81 - CALCUTTA High Court) wherein held entire amount paid as cess on green leaf seems to be eligible for deduction - Decided against revenue
Claim of subsidy for the purpose of ascertaining the book profit u/s 115JB - CIT(A) allowed claim - Held that:- this issue is only consequential to the first ground raised by the revenue. There, we have directed the ld. AO to grant exemption u/s 10(30) of the Act towards tea plantation subsidy to the extent of subsidy received during the year subject to production of certificates from Tea Board to that effect. We hold that whatever is allowed by the ld. AO pursuant to that ground, the same amount had to be reduced from the net profit as per profit and loss account towards exemption u/s 10(30) of the Act for the purpose of ascertaining the book profit u/s 115JB of the Act - Decided in favour of revenue for statistical purposes.
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2015 (12) TMI 1454
Addition u/s 69B - unexplained investment made on the basis of DVO's report - CIT(A) deleted the addition - Held that:- Following the judgment of CIT vs. Lucknow Public Educational Society [2011 (3) TMI 1326 - Allahabad High Court ] we hold that the reference to the DVO without rejecting the books of account is bad and therefore the valuation report submitted consequent thereto cannot be relied on for making an addition. Thus, no addition on account of unexplained investment is sustainable in the eyes of law. We, therefore, find no infirmity in the order of the ld. CIT(A) and we accordingly confirm the same. - Decided in favour of assessee.
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2015 (12) TMI 1453
Addition u/s 68 - CIT(A) deleted the addition - Held that:- The Assessing Officer made this addition on account of unsecured loan as the assessee was not explained the source of cash credit. The Assessing Officer came to this conclusion mainly on the ground that the assessee-company failed to prove that the statement recorded from Shri Mukesh C. Choksi and Shri Jayesh Sampat by the Investigation Wing was incorrect. According to the Assessing Officer, the genuineness of the transaction could not be proved. In appeal, the CIT(A), having considered the submission of assessee-company, has rightly deleted the addition on both accounts (i.e. ₹ 85 lakhs on account of share application money and ₹ 30,47,169/- on account of unsecured loan) by holding that the assessee-company had duly discharged the initial burden in respect of identity, creditworthiness and genuineness of all transactions by relying on various judicial pronouncements.
Thus, this addition is not justified under the provisions of Section 68 of the Act. Therefore, we do not see any reason to interfere with the findings of the CIT(A) who has rightly deleted the amount on account of unsecured loan which was made by the Assessing Officer u/s 68 of the Act. - Decided in favour of assessee
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2015 (12) TMI 1452
Utilization of CENVAT Credit to pay service tax under reverse charge - levy of service tax on import of services u/s 66 A of the Finance Act 1994 - Held that:- Plain reading of the said sub-Rule 4 of Rule 3 of CCR indicates that Cenvat Credit may be utilized for the payment of service tax on any output service. We find from the provisions of Rule 2(r), which provides that "provider of taxable service" includes person who liable for paying service tax; Rule 2(p) provides that "output service" means taxable service provided by the provider of taxable service. Reading holistically, if the appellant is required to discharge the service tax under reverse charge mechanism, then it has to be conclude that he is provider of taxable service who provides output service.
In our view, the lower authorities were incorrect in interpretation of the provisions and holding that appellant could not have utilised Cenvat Credit for discharge of service tax. - impugned order is incorrect and unsustainable. The impugned order is set aside - Decision in the case of TATA AIG Life Insurance (2014 (4) TMI 637 - CESTAT MUMBAI) and Panchmahal Steel Ltd. (2014 (12) TMI 876 - GUJARAT HIGH COURT) followed - Decided in favour of assessee.
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2015 (12) TMI 1451
Benefit of VCES - whether the petitioner, who is an assessee for the service tax payable for the years 2010- 11, 2011-12 and 2013-13, is entitled to file the declaration on 21.6.2013 before the fourth respondent seeking to declare that the petitioner is entitled to get the benefit of VCES in the light of Section 106(2) of the Finance Act, 2013 - Held that:- If a declaration is made by a person against whom an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of search of premises or an audit has been initiated, during the pendency of such an inquiry as on the first day of March, 2013, the designated authority shall by an order reject such declaration with the reasons to be recorded therein.
In the present case, admittedly the premises of the petitioner came to be visited by the internal audit section of the respondents and an audit was conducted on 25.2.2013 and 28.2.2013. During the course of audit, the audit party noticed that the assessee was also providing renting of immovable property service, but had not taken registration for this service nor had included this service in the service tax registration certificate and also not paid the service tax for the renting of immovable property service. Hence the matter was under consideration of audit as on 1.3.2013, which is not yet being over. Therefore, as per Section 106(2) of the Finance Act, the petitioner is not entitled to get the benefit of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES), hence the fourth respondent, rightly in this case, has rejected the application dated 21.6.2013 holding that the petitioner is not entitled to get the benefit of the VCES.
Court is not inclined to interfere with the impugned order of rejection of the declaration filed by the petitioner. Accordingly, the writ petition fails - Decided against assessee.
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2015 (12) TMI 1450
Delayed filings of return - Penalty u/s 76 - claim of relief for waiver of penalty u/s 80 - outdoor publicity services - Held that:- t the appellant had not furnished any material to substantiate its claim that it was under severe financial hardship. - no materials were made available, by the appellant, to show that the erstwhile partnership firm had been converted into a sole proprietary concern. The service tax payable, by the appellant, for the period, between May 1997 and April 2000, had not been paid, for nearly about 3 years. Therefore, the appellant had been imposed with the penalty, under Section 76 of the Act. Since no acceptable cause or reason had been shown by the appellant for exercising its discretion, for waiving the penalty, under Section 80 of the Act, the penalty amount levied on the appellant had been confirmed by the Tribunal. In such circumstances, we do not find any reason to interfere with the impugned order passed by the Tribunal, dated 22.11.2010. Further, it is seen that the decisions relied on by the learned counsel, appearing on behalf of the appellant, are not applicable to the facts and circumstances of the present case.
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2015 (12) TMI 1449
Business Auxiliary Service - Invocation of extended period of limitation - commission received by the respondent from BSNL for the sale of SIM cards - Held that:- in the case of Prakash R. Jaiswal (2015 (12) TMI 680 - CESTAT MUMBAI), it was held that, invocation of extended period in this case seems to be incorrect as the issue was being agitated before the judicial forum. Accordingly, we hold that the show-cause notice which invokes the extended period for demand of service tax from the appellant-assessee needs to be set aside and we do so. However, for the demand within the period of limitation from the date of issuance of show-cause notice we hold that the appellant-assessee is liable to pay the service tax liability along with interest.
In the present case, service tax arises within the limitation period and the respondent-assessee is liable to pay the service tax along with interest. - Decided partly in favor of assessee.
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