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Showing 81 to 100 of 2044 Records
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2019 (1) TMI 1966
Legality of remanding the case - Revision of assessment - mismatch of data - opportunity of hearing not availed - HELD THAT:- The mismatch is not the only issue, but there are other issues. Apart from that, the assessee failed to avail the opportunity granted by the Assessing Officer vide notices dated 06.4.2018, 07.5.2018 and 21.5.2018 and also failed to respond to the summons dated 29.8.2018. Therefore, even though one among the issues may arise out of mismatch, we find that the details have been fully furnished namely names of the dealers, tax payer identification numbers, invoice numbers, dates and value of the products. If the assessee has a genuine case, they would have reconciled by producing necessary records before the Assessing Officer. Hence, the learned Single Judge was perfectly right in not entertaining the writ petition and relegating the assessee to file an appeal under the Statute.
The learned Single Judge granted the assessee two weeks' time to file an appeal and this time is extended by two weeks from the date of receipt of a copy of this judgment - The writ appeal is dismissed.
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2019 (1) TMI 1965
Validity of Revision u/s 263 - exclusive jurisdiction u/s 263 of PCIT - PCIT has called for proposal from JCIT/Assessing Officer to exercise his jurisdiction - HELD THAT:- Since the department could not controvert the contents of the letter of the JCIT which clearly brings out that ld. PCIT has called for proposal from JCIT/Assessing Officer to exercise the jurisdiction u/s 263. It means the ld. PCIT has not exercised the jurisdiction u/s 263 himself but he exercised the jurisdiction at the instance of the AO / JCIT which is against the provision of law. The power of revisional jurisdiction is vested only with the ld. PCIT. Therefore we note that the exercise of the jurisdiction u/s 263 of the Act itself is not in accordance with law hence we cancel the order passed by ld. PCIT u/s 263 of the Act. - Appeal of assessee allowed.
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2019 (1) TMI 1964
Assessment u/s 153A - Whether ITAT was correct in holding that completed assessment could not be abated unless some incriminating evidence or material was found during search qua the additions made by the AO? - HELD THAT:- It is an undisputed position that the issue is covered by the judgment in case of Commissioner of Income Tax Vs. Continental Warehouisng Corporation (Nhava Sheva) Ltd. and anr. [2015 (5) TMI 656 - BOMBAY HIGH COURT]. In such judgment the view of the High Court was that only undisclosed income and undisclosed assets detected during search could be brought to tax in relation to these years for which the notice under section 153A of the Income Tax Act, 1961 has been issued. Under the circumstances, tax appeals are dismissed.
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2019 (1) TMI 1963
Deduction u/s.80IA - manner of computation of deduction qua the set off of carry forward of losses - Disallowance of valid as there are no actual profits available with the assessee - Claim for second year - AO disallowed the claim of the assessee in the instant year too on the ground that the notional losses of the windmill undertaken must be first set off against the profits of the windmill - HELD THAT:- We find that there is no dispute on the fact that the assessment year 2009-10 is the initial assessment year in the hands of Kirloskar Oil Ltd. The dispute is only with respect to the manner of computation of deduction qua the set off of carry forward of losses. Further, we find there is no clarity as to the outcome of appeal by the Revenue for the A.Y. 2009-10 in the hands of Kirloskar Oil Ltd. who is the owner of the unit before demerger.
In this case, assessee acquired windmill undertaking from the Kirloskar Oil Ltd. A.Y. 2009-10 is the initial assessment year in the hands of Kirloskar Oil Ltd. Hence, the A.Y. 2010-11 is the 2nd year in the hands of the assessee. Otherwise, there is no clarity in the orders of the AO on the amount of loss validly quantified in the hands of undertaking at the time of demerger to the assessee. Therefore, there is requirement of basic details on the said issue qua the figures of losses and profits over the years of the undertaking.
Law is more or less settled on this issue on the issue of manner of set off of notional losses of earlier assessment years which was already set off against the profits of the other undertakings. The judgmental law does not permit the set off of notional losses by the AO for eating away the eligible profits for the year under consideration.
Case of CIT Vs. Hercules Hoists Ltd [2017 (6) TMI 1125 - BOMBAY HIGH COURT]is one such judgment which is required to be regarded and applied to the facts of the present case. In our considered opinion, this issue required fresh consideration at the level of CIT(A) for applying the binding judgments on the issue. Ld. Counsel for the assessee is also directed to supply necessary judgments on the specific issue of the manner of computation of deduction u/s.80IA(4) of the Act in the second year of the block of assessment years specified in the law. With these directions, we allow Ground No.3 for statistical purposes.
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2019 (1) TMI 1962
Depreciation @60% on the equipments connected to V-SAT (i.e. Transformer, UPS etc.) - HELD THAT:- As we can see, V-SAT cannot function in isolation without the help of computer. Therefore, as relying on BSES YAMUNA POWERS LLD / BSES RAJDHANI POWERS LTD.[2010 (8) TMI 58 - DELHI HIGH COURT] where in it is held that computer accessories and peripherals such as printers, scanners and server form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are part of the computer system, they are entitled to depreciation at the higher rate of 60%.Thus assessee is entitled for 60% depreciation. Thus, this ground of revenue is dismissed.
Disallowance of administrative expenses u/s. 14A - HELD THAT:- CIT(A) has rightly restricted as administrative expenses u/s. 14A and same does not require any kind of interference at our end. Thus, we dismiss this ground of appeal of the revenue.
Disallowance of amount paid in respect of provision for Employee Long-term Compensation Plan - HELD THAT:- As we can see, ld. A.O. had disallowed the provision for leave encashment as no payment has been made against the said provision during the year. In the case of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] has held if a liability has been ascertained with a reasonable certainty and the actual quantification is not material to claim the expenditure.Therefore, respectfully following the aforesaid Hon’ble Supreme Court judgment and in our considered opinion, the ld. CIT(A) has rightly granted relief to the assessee. Therefore, this ground of appeal is dismissed.
Disallowance of weighted deduction u/s. 35(2AB) of recurring expenses related to building municipal taxes and salary to Mr. C. Dutt. - HELD THAT:- In this case, ld. CIT(A) has followed assessment year 2005-06 [2012 (7) TMI 273 - ITAT AHMEDABAD] to allow the claim - Decided against revenue.
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2019 (1) TMI 1961
Entitlement to deduction of lease equalisation charge - whether the deduction on account of lease equalisation charges from lease rental income can be allowed under the Income Tax Act, 1961, on the basis of Guidance Note issued by the Institute of Chartered Accountants of India (ICAI)? - HELD THAT:- As decided in VIRTUAL SOFT SYSTEMS LTD. [2018 (4) TMI 1472 - SUPREME COURT] it is wrong to say that the Respondent claimed deduction by virtue of Guidance Note rather it only applied the method of bifurcation as prescribed by the expert team of ICAI. Further, a conjoint reading of Section 145 of the IT Act read with Section 211 (un-amended) of the Companies Actmake it clear that the Respondent is entitled to do such bifurcation and in our view there is no illegality in such bifurcation as it is according to the principles of law. Moreover, the rule of interpretation says that when internal aid is not available then for the proper interpretation of the Statute, the court may take the help of external aid. If a term is not defined in a Statute then its meaning can be taken as is prevalent in ordinary or commercial parlance. Hence, we do not find any force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act.
We are of the view that the Respondent is entitled for bifurcation of lease rental as per the accounting standards prescribed by the ICAI. Moreover, there is no express bar in the IT Act regarding the application of such accounting standards. - Decided against revenue.
Levy of interest u/s 234D - HELD THAT:- The issue is settled by the judgment of the Supreme Court in the case of Commissioner of Income Tax -I V. Reliance Energy Ltd. [2013 (10) TMI 280 - SUPREME COURT] wherein the Supreme Court holds that the provisions of section 234D would be attracted in the case of assessments made after the date of its insertion, being 01.06.2003.
In the instant case, the orders of assessment for Assessment Years 1999-2000 and 2002-03 are 18.03.2005 and 31.03.2005, both being subsequent to 01.06.2003. Accordingly, the provisions of section 234D would stand attracted in both cases. Decided against the assessee.
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2019 (1) TMI 1960
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor has defaulted in making payments of the outstanding dues to the tune of ₹ 23,55,81,656.54p as on 31.12.2017. The calculation of interest can be seen from the documents placed at pages 193 A, 193 B and 193 C of the typed set filed with the Application. The Financial Creditor further supported the claim with the Statement of Account, which is placed at pages 194 to 316 of the typed set filed with the Application. It is reiterated by the Learned Counsel for the Financial Creditor that the Corporate Debtor has filed Balance Sheet for the year 2011-2012, and thereafter, no Balance Sheet has been filed - the Financial Creditor has initiated SARFAESI proceedings by issuing a Demand Notice dated 06.06.2011 under Section 13(2) of the SARFAESI Act, 2002 and followed by the Possession Notice dated 15.09.2011 under Section 13(4) of the SAPFAESI Act against the Corporate Debtor, copies of which are placed at pages 317 to 321 of the typed set filed with the Application. The Learned Sr. Counsel for the Financial Creditor has submitted that the Financial Creditor has also filed Original Application No. 376/2013 against the corporate Debtor before the Debts Recovery Tribunal at Ernakulam, which is pending.
The documentary evidence which is placed on the case file is sufficient in order to ascertain the existence of a default on the part of the corporate Debtor. Therefore, in the light of the facts and circumstances recorded, and the legal position stated, the Financial Creditor has fulfilled all the requirements of law, for admission of the Application filed under Section 7 of the I&B Code, 2016 and proposed the name of the IRP. Hence, the Application stands admitted. The commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed.
Application admitted - moratorium declared.
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2019 (1) TMI 1959
Seeking approval of this Tribunal to the final/revised Resolution Plan submitted by Tri-county Premier Hearing Services Inc, Resolution Applicant (RA) - section 60(5)(c) read with section 30(6) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Plan seeks approval of this Tribunal to the effect that post the approval of the resolution plan by this Tribunal, no re-assessment/revision or any other proceedings under the provisions of the Income Tax Act or any other statutory Act should be initiated on the Company in relation to period prior to acquisition of control by the RA and any consequential demand should be considered non-existing and as not payable by the Company. Any proceedings which were kept in abeyance in view of process under the code or otherwise should not be revived post the order of this Tribunal. The Income Tax Department to grant exemption from the applicability of provisions of section 79, section 41(1) and section 28 of Income Tax Act 1961 in relation to the Plan. The said reliefs cannot be granted and are hereby rejected.
The Plan further seeks immunity from any actions and penalties (of any nature) under any law for any non-compliance of laws in relation to the Company or by the Company, which was existing as on the date of acquisition of control by the Resolution Applicant over the Company and which continues for a period of upto 12 months after the acquisition of control by the Resolution Applicant over the Company. The said reliefs cannot be granted and are hereby rejected - Plan also seeks immunity for the RA and the Company from any actions and penalties (of any nature) under any law for any non-compliance of laws in relation to the Company or by the Company, which was existing as on the Completion Date and which continues for a period of upto 12 months after the acquisition of control by the RA over the Company. The said reliefs cannot be granted and are hereby rejected.
The resolution plan is approved with modifications, as mentioned above, which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan - moratorium order under section 14 shall cease to have effect from the date of this order.
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2019 (1) TMI 1958
Levy of GST - Abhivahan Shulk - Road Usage Charges - Fee for ambient air monitoring - Khanij Sampada Shulk - Motor Vehicle Tax - GST applicability on penalty paid by the applicant on unaccounted stock of river bed material (RBM) - Vehicles (pokland, JCB, Dumper 7 Tipper) purchased and used by the applicant in its day to day business activities for movement of goods from one place to another - fall within the definition of motor vehicle under the provisions of GST law or not - input credit of GST paid by the applicant at the time of purchase or repairs including spare-parts w.r.t. above vehicles.
Penalty paid on stock of RBM on the orders of DM is outside the scope of supply or in the alternative it is an exempt service under GST and hence not taxable under RCM - HELD THAT:- We agree with the contention of the appellant that penalty cannot be considered as a consideration for any service since such an amount is paid for contravention of certain provisions of law made for general public. The penalty imposing/collecting agency is not expected to or is providing any service to the particular person who is paying the penalty. Penalties are inbuilt in provisions of law to ensure its strict compliance and it acts as a deterrent for violators. No quid pro quo, which is an essential ingredient for 'service' as held by a catena of decisions of the Apex Court and also lower judicial forum, is present when a person pays penalty to a government or semi government agency. The penalty is imposed by such an agency in the course of imparting its sovereign responsibilities and it is not done for any commercial consideration or for furtherance of business. Penalty is different from `fees' collected by such agencies in as much as the agency is supposed to render certain specific service to a specific class of person in lieu of the fees.
It is basically a punishment for violation of law and the monetary element of the penal provision is introduced into it to dissuade and to act as a deterrent and not for any commercial consideration or- for furtherance of business. The penalty so collected, is used by the agency for the good of the general people. Hence, in such cases, the penalty does not satisfy the definition of 'consideration' as contained in GST Act and is therefore not liable to be taxed.
In the present case, the said royalty is charged and collected by the Government of Uttarakhand in terms of powers exercised under the Mines and Minerals (Development and Regulation) Act 1957, the Uttarakhand Secondary Minerals Rules 2001 read with Minerals Policy 2015 and is therefore a 'consideration' as defined in GST Act, since in lieu of that the District Geology & Mining Department had given him the right to remove and transport RBM and also has ensured the continued availability of the said RBM to the appellant and is therefore undoubtedly subject to levy of GST at the appropriate applicable rates. In fact, the appellants appear to have been paying or at least seem to be aware of, such GST on their legally procured and accounted stock of RBM, as is obvious from para 9 of Annexure-I of the appeal memorandum, wherein they have claimed that since no GST was paid on the purchase of unaccounted stock, so the advance ruling was sought. Therefore, we hold that the payment of ₹ 19658100/- was made by the appellants as royalty which is covered by Heading No. 9973 at entry serial no. 17 of Notification no. 11/2017-CT(R) dated 28.06.2017 and the GST is applicable at the rate prescribed therein.
Taxability of Abhivahan Shulk and Khanij Sampada Shulk - HELD THAT:- Abhivahan Shulk is paid to TVPV only by the license holders and in lieu of this fee, the govt, agency is ensuring the right of passage as well as continued maintenance of supplies. Similarly, Khanij Sampada Shulk is paid only by the lease holders who have been given the right to extract, transport and sell RBM by the District Geology & Mining Department who are providing service to the lease holder through allowing right of mining and passage and ensuring supply and ensuring the fulfilment of all other conditions of the lease agreement. Both these fees are collected from a particular class of people i.e. holders of licence/lease allotted by the respective govt. agencies, who are providing the said services only to those particular group of people and not to the general populace. Thus quid pro quo between the person paying the fee and the collecting agency is very much present and both the cases qualify as 'services' and both the fees are 'consideration' in terms of GST Act definition - both the fees are to be included in the taxable value, as defined in Section 15 of the GST Act 2017, of the service and are taxable to GST at appropriate rates.
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2019 (1) TMI 1957
Disqualification of Directors - default in submitting returns which were statutorily required to be filed with the Registrar of Companies with regard to the affairs of the Company in question, for a continuous period of three financial years - HELD THAT:- It cannot be denied that the issues raised in this writ petition require adjudication and are of grave importance so far as the working of the spirit, intendment and object of the Companies Act, 2013, more specifically the manner in which the respondents would operate Sections 164 and 248 of the enactment.
Issue notice to the respondents. Mr. Siddharth Khatana, Adv., accepts notice on behalf of the respondents - Till the next date of hearing, there shall be a stay of the notices dated 6thSeptember, 2017 and 12th September, 2017 whereby the petitioners were declared disqualified as Director under Section 164(2)(a) of the Companies Act, 2013.
List on 4th February, 2019.
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2019 (1) TMI 1956
CENVAT Credit - non-receipt of inputs - cenvat credit availed without receipt of inputs - entire case is mainly based on various statements and other evidences - HELD THAT:- The entire case is mainly based on various evidences including the statement of various persons. On the request of the appellant, some of the witnesses were cross examined, however, majority of witnesses were not cross examined. In such situation, the adjudication of the SCN without cross examination does not appear to be proper. Therefore, matter needs to be re-considered as a whole after conducting the cross examination of all witnesses. Needless to say that the commissioner is not prevented from adjudicating the SCN on the basis of cross examination of whichever witnesses appear for cross examination and on the basis of other evidences on record.
The matter is remanded to the adjudicating authority for passing afresh order after allowing the cross examination of all the witnesses. The appellant shall be given sufficient opportunity of personal hearing and making their submission after cross examination - appeal allowed by way of remand.
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2019 (1) TMI 1955
Exemption u/s 11 - assessee has given donation to a trust which is involved in the bogus transactions - HELD THAT:- We find that the activities of the trust in relation to its education activities have not been doubted and on the basis of same activities various registrations u/s 12A, 80G and 10(23C) were awarded to the assessee. Simply the assessee has given donation to a trust which is involved in the bogus transactions cannot be the basis for the denial of the registration certificates - Decided in favour of assessee.
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2019 (1) TMI 1954
Validity of Reopening of assessment u/s 147 - Petitioner having not filed the objections before the AO against the reasons stated for re-opening - HELD THAT:- Petitioner by way of their communication requested the Assessing Officer to provide the reasons for re-opening the assessment. Consequently, the AO furnished those reasons through their communication. Even though such communication intimating the reasons for re-opening was received by the assessee, admittedly, they have not chosen to file any objections before the Assessing Officer. Needless to say that when no objection is received from the assessee, on the reasons set out for re-opening the assessment, the Assessing Officer cannot be found fault with in passing the consequential assessment order dated 07.12.2018 under Section 143(3) r/w 147 of the IT Act,1961. This is what happened in the present case.
Therefore, the petitioner having not filed the objections before the Assessing Officer against the reasons stated for re-opening, is not entitled to question about the re-opening before this Court by way of filing the present writ petition. On the other hand, it is for the assessee/petitioner to file a regular statutory appeal before the First Appellate Authority, as this Court is not inclined to entertain this writ petition only on the above stated reasons. The other contentions raised on merits of the assessment are not considered by this Court by expressing any view.
Writ petitions are disposed of, by granting liberty to the petitioner to file a statutory appeal before the Appellate Authority by raising all the contentions within a period of four weeks from the date of receipt of a copy of this order.
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2019 (1) TMI 1953
Determination of income from Kalhar Project - AO has treated the assessee as owner of Kalhar Project whereas the case of the assessee is that it is a developer - HELD THAT:- Stand of the assessee before the AO was that being a developer, its rights were limited to receive development fees on completion of project. The society is owner and has right, title and interest on work-in-progress. This stand of the assessee has been accepted by the CIT(A) in both the assessment years. Contrary to this stand, nothing has been brought to our notice. The assessee has demonstrated that it was working only as a developer and alleged collection over expenditure cannot be treated as its business income, rather, it was a liability in the balance sheet. Therefore, we are of the view that the CIT(A) has rightly deleted this addition and, no interference is called for. Similarly, in A.Y.2009-10 and addition was made on account of excess of collection over expenses. It was deleted by CIT(A). We do not find any error in the order of the ld.CIT(A). Thus, this ground is rejected in both years.
Estimation of profit on WIP at 8% of the various projects - HELD THAT:- Assessee was working as a developer. It was not owner of work-in-progress. Moreover, on completion of project, it used to offer receipt received in the shape of development fees and such receipts have been recognized on completion of project. Consistently, this has been shown by the assessee.
AO has made an addition on hypothetical basis by treating the WIP belonged to the assessee. It has been contended before us that the AO has invoked Accounting Standard-7 which otherwise applicable on contractor. The assessee is a developer, and AS-7 is not applicable. After going through the finding of the ld.CIT(A) and relying upon the order of the ITAT in the assessee’s own case for the Asstt.Year 1997-98, we are of the view that 8% profit on alleged WIP cannot be estimated in the case of the assessee. Hence, the ld.CIT(A) has rightly deleted this addition in both the years. No other ground has been agitated by the Revenue in the Asstt.Year 2008-09. Hence, its appeal is rejected.
Accrual of receipts - HELD THAT:- Efforts at the end of the AO are to somehow to make the assessee the owner of the project and assess any type of receipts by the assessee. In his first attempt, he assessed gross collection over expenditure out of booking amount. In that effort also he treated the assessee as an owner of the project. Thereafter, the second outcome of his understanding is estimation of profit at 8% of the work-in-progress. In both these issues, the ld.CIT(A) has held that the assessee is not owner of the project nor WIP related to it. Hence, excess of collection over the expenditure or estimation of profit in the WIP cannot be assessed in the hands of the assessee. In the third set, he construed that if after signing memorandum of satisfaction between the ultimate buyer vis-à-vis the assessee, who developed the project, any receipt is being received, then it will be income of the assessee. The assessee again emphasised that whatever amount has been received, it was in fiduciary capacity of trustee of these co-operative societies for whom it has been worked out development activity. The ld.DR failed to bring any material to our mind which can demonstrate that these receipts were meant for the assessee, and income qua this receipt accrued to the assessee.
Reopening of assessment u/s 147 - HELD THAT:- AO harboured a belief that income has escaped assessment in the case of assessee on the basis of material found during the course of search at the premises of vendee who alleged to have purchased the plot from the assessee, and disclosed cash payment over and above one stated in the sale deed. Revenue was possessing statement of vendee recorded under section 132(4) and a diary showing details of payment. Thus, there was information possessed by the AO for harbouring a belief that income has not been rightly accounted for by the vendor. The AO has to only form a prima facie opinion which has formed on the basis of information came to the notice on account of search at the vendee’s premises. Therefore, this ground of appeal is rejected in both the years.
Disallowance u/s 14A - HELD THAT:- A perusal of the assessment order would indicate that the AO has worked out interest expenditure at ₹ 1,56,494/-. No doubt, this expenditure cannot be worked out, once the assessee has demonstrated the availability of more interest free funds, then investment made by it. But the ld.AO further worked out a sum of ₹ 1,36,936/- at the rate of 0.5% of the average value towards administrative expenditure under Rule 8D. CIT(A) has not given any justification for deleting this amount. AO has reproduced submissions made by the assessee, wherein it has submitted that interest expenditure was not incurred by the company for the purpose of deriving exempt income, but it has not given any explanation qua expenditure attributable towards administrative purpose. Considering the above aspects, we allow this ground of appeal partly and confirm addition of ₹ 1,36,936/- out of ₹ 2,93,430/- made by the AO. This ground of Revenue is partly allowed.
Addition on account of cessation of liability or non-genuineness of the liability available in the accounts - HELD THAT:- AO merely submitted that the assessee was requested to discharge its onus. All these details were already submitted to the AO during the appellate hearing also, when remand report was called for. The difficulty is that the AO does not want to apply his mind and does not want to carry out the exercise directed by the higher authority. He on lame excuse of assessee failing to give supporting evidence again made addition. The ld.CIT(A) again verified it and deleted. Before us, nothing has been produced by the AO as to how reconciliation, regrouping and reclassification of the liabilities in the accounts are wrong. No report from the AO has been called for by the CIT(Admn.) who authorizes for filing of appeal. Even before us, the ld.DR unable to demonstrate how the liability has ceased and this addition deserves to be made. Taking into consideration the details submitted by the assessee, discussion made by the ld.CIT(A) in the quantum order i.e. dated 23.3.2010 and re-appreciated again by the ld.CIT(A) in the impugned order, we do not find any merit in this appeal
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2019 (1) TMI 1952
GP estimation on bogus purchases - HELD THAT:- We found that assessee has already disclosed GP of 23%, 20% in the A.Y.2010-11 and 2011-12 under consideration. Assessee had also filed quantitative details of purchases and sales before the lower authorities. Considering the various judicial pronouncements placed on record, vis-à-vis GP rate declared by the assessee, we direct the AO to restrict the disallowance to the extent of 5% of alleged bogus purchases.
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2019 (1) TMI 1951
TP Adjustment - applicability of MAP proceedings to non-US - applicability of percentage of same margin for remaining transaction - HELD THAT:- As considered MAP proceedings and resolutions and the judicial decision and working procedure are in agreement with the submissions made by the learned AR on this issue for applicability of some margin be applied for remaining 16% of the transactions of the assessee and accordingly this ground of appeal of the assessee is allowed for statistical purposes. We direct the TPO accordingly.
Lease on equipment being capital in nature - AR could not substantiate with any evidence that the transaction is non-financial lease and on perusal of the agreement as referred to by the assessee, it is in the nature of financial lease and even before us no evidence has been filed to substantiate that it is not a transfer of asset from the beginning to end of the period of lease. We found that the assessee, as per the financial lease agreement, has an option to purchase the asset on completion of term and on this aspect, AO has to consider. Therefore, we consider it appropriate to remit this issue to the AO for verification of financial lease agreement and also assessee shall file tripartite agreement in respect of lease.
Reimbursement of salary expenses on employees - Assessee, as per audit accounts for the said accounting year referred at page 528, the managing director has been a signatory and the assessee undertakes to file Form No. 32 and Board Resolution to that effect. Further, after hearing for a long time, the learned DR has brought to the notice of the bench that this issue was referred to Special Bench whereas we, accept the decision of the special Bench in particular to this case - CIT(A) also made observations that the assessee has not substantiated before lower authorities about appointment of managing director with any evidence and further we are of the substantive opinion that the matter was referred to Special Bench, But the facts have not been verified by the AO in respect of managing director. Therefore, both the parties have agreed for the same and there is no loss of revenue to the department, if the matter is restored to the file of the AO for verification and examination and by that time we are of the considerable hope that the decision of the special bench also be available to the AO - we are of the substantive opinion that the matter is restored to the file of the AO as agreed by both the parties for verification and examination and the assessee shall co-operate in submitting information as expeditiously as possible.
SAP implementation charges - We are of the opinion that when the project is not implemented and there is no expenditure claimed, such type of expenditure shall not be clubbed with revenue expenditure without matching concept of income and expenditure is applied. Therefore, the claim of the assessee on this aspect cannot be considered and we confirm the action of the CIT(A) on this ground and dismiss the ground of appeal.
Non-deduction of TDS u/s 194J - Fee for providing internet / broadband facility - HELD THAT:- Assessee has simply obtained broadband / Internet facility from the service provider M/s. Tata Indicom. It is not a case where a service contract has been entered into. The facility is open to all and sundry and any member of the public can avail of it. In such circumstances, the view of the AO that the nature of service rendered as an element of implicit contract is struck down and therefore, the addition cannot be sustained in first appeal.
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2019 (1) TMI 1950
Recovery of debts - Attachment of rent of the property - petitioners submitted that the petitioners are neither borrowers nor guarantors and have not created any sort of encumbrance in favor of respondent-Bank in respect of the property in question - HELD THAT:- The writ petitions are disposed of with liberty to the petitioners to make representation to the Recovery Officer within a period of one week from the date of receipt of certified copy of the order passed today.
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2019 (1) TMI 1949
Dishonor of Cheque - matter under Section 138 of the Negotiable Instruments Act stands compromised - HELD THAT:- Considering the fact that the complaint filed under Section 138 of the Act was compromised as the petitioner has paid the entire cheque amount to the complainant and later on the same was withdrawn on 09.09.2017, there are merit in present petition as the petitioner has also shown a bona fide cause for non-appearance before the trial Court on the date when the impugned order was passed on 24.10.2016. It is submitted that the service was not effected on the residential address of the petitioner and he was not aware of the fact and immediately on coming to know about the said order, he compromised the case with the complainant and the complaint under Section 138 of the Act was withdrawn later on.
Petition allowed.
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2019 (1) TMI 1948
Addition u/s 68 - Unexplained share capital along with the share premium - burden of proofs viz. identity of the creditor, his creditworthiness and genuineness of the transaction u/s.68 - CIT-A deleted the addition - HELD THAT:- As the net owned funds of each share applicant were several times more than the investment made in equity of the assessee. It is evident that each share applicant had substantial resources of their own compared with the total investible funds available with each share applicants and that investment made in the equity shares and the assessee company was not significant. We note that the AO did not point out any defect or infirmity in the documents placed on record by the assessee as well as the share subscribers. Thus the creditworthiness of the aforesaid share subscribers cannot be disputed.
Assessee had produced the aforesaid documents to explain the nature and source of the share capital along with share premium of the four corporate shareholders. We note that the AO had accepted the share capital subscribed by these four corporate entities. However, without pointing out any defects has arbitrarily without giving any reason by a cryptic order has added the entire share premium which was also given by the very same four corporate entities u/s 68 of the Act. The Ld. AR brought to our notice that the similar additions were made by the same very AO in five cases wherein the AO accepted the share capital but added the share premium which action of the AO was not upheld by the Tribunal.
As share premium cannot be added in the hands of the assessee u/s. 68 of the Act since the proviso was inserted u/s 68 of the Act only from AY 2013-14 and similar additions made only on share premium was directed to be deleted and which action has been upheld by the Hon’ble Bombay High Court in Pr. CIT Vs. Apeak Infotech [2017 (9) TMI 1590 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2019 (1) TMI 1947
Disallowance of payment of rent by CoC - HELD THAT:- The landlord cannot negotiate the security amount nor can adjust the payment. With regard to the current rent as Section 14 moratorium is not applicable, the Adjudicating Authority has rightly directed the parties to pay rent w.e.f. 1st December, 2018 or make suitable arrangements in the alternative.
The appellant are allowed to pay the rent w.e.f. 1st December, 2018 and onwards i.e. up to the date of moratorium. Rent of December, 2018 be paid by 15th February, 2019. Rent for the month of January, 2019 be paid by 28th February, 2019. Thereafter the rent for each month should be paid by 15th of next month.
Appeal disposed off.
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