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Showing 101 to 120 of 1903 Records
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2015 (11) TMI 1806
Validity of seizure order - allegation is that the entries made in Form 21 accompanying the goods were likely to vanish and would not remain secure for long - HELD THAT:- The only discrepancy pointed out for seizing the goods is that Form 21 was filled up by two separate pens as is evident from the ink used therein and that some of the entries made by one of pen was in such a ink that they were likely to fade away and ultimately vanish. It is only on the above ground that the some of the entries in Form 21 would ultimately vanish that the order was passed directing the seizure of the goods.
The Act and the Rules does not prescribe the type or the nature of the ink to be used in filling up the prescribed Form.
There is no provision under the Act which provide for seizing the goods on account of use of improper ink in filing up the Forms or for the reasons that some of the entries made in the documents would ultimately vanish.
The assessee has produced extract of the copies of the register maintained by it containing entires of dispatch of the aforesaid goods and its receipt by consignee. In view of these documents, it cannot be said that the assessee had committed any illegality in the transportation of the goods and that they were not accompanied by the necessary documents duly filled up.
The question raised above is answered in favour of the revisionist and against the revenue and it is held that the Tribunal committed an error in affirming the order of seizer. The goods were not liable to be seized for the reason that the entries in the prescribed Form accompanying the goods were in such ink as would not last long - revision allowed.
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2015 (11) TMI 1805
Disallowance of Depreciation in respect of jetties constructed by the assessee and used for the purpose of business - HELD THAT:- As decided in own case [2012 (8) TMI 493 - ITAT, MUMBAI] we hold that the assessee is entitled to claim depreciation on the Jetty, referred above. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to allow depreciation claimed by the assessee.
Disallowance of lease rent - Claim allowed as relying on own case.
Contribution of Stafff welfare expenses - No disallowance invoking the provisions of section 40A(9)
Treatment of sales tax exemption received from the Gujarat Government as capital receipt
Addition of Cenvat Credit - AO took the view that the value of cenvat credit lying unutilized at the close of the accounting period ought to have been included in the value of closing stock as per the provisions of section 145A - HELD THAT:- As decided in own case [2012 (8) TMI 493 - ITAT, MUMBAI] we hold that if the closing stock to be increased on account of unutilised MODVAT credit, the corresponding opening stock of that year is also to be increased, as the Department has not disputed the fact that the purchases have been debited exclusive of the excise duty element i.e., by adopting net method of purchases. If the value of closing stock is increased by the MODVAT, the purchases should also be increased by a similar amount. Therefore, the issue is squarely covered in favour of the assessee
Eligible deduction u/s 80IA - Captive power generation plant - HELD THAT:- Assessing Officer will examine whether the submission of the assessee with respect to the rate taken is correct . If it is found that the rate charged by the suppliers is lower than the rate adopted for sale by the captive power generating units of the assessee, such rate would be taken by the AO for computing the profits of the eligible business, eligible for deduction u/s 80IA. However, if the rate charged by the suppliers is the same as the rate adopted for sale by the captive power generating units of the assessee, such rate adopted should be accepted for the purposes of working out the deduction u/s 80IA - Sec. 45 of The Electricity Act, 2003 and submitted that the restriction with regard to the charges to be collection on supply of electricity shall be applicable only to a “Distribution licensee” and the said restrictions shall not apply to the Captive power generating units.
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2015 (11) TMI 1804
Disclosure of undisclosed income u/s 132(4) - whether disclosures made voluntarily and without any element of coercion could not be retracted without cogent evidence - HELD THAT:- For the reasons stated in the order [2015 (11) TMI 23 - GUJARAT HIGH COURT] it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law so as to warrant interference.
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2015 (11) TMI 1803
Revision u/s 263 - HELD THAT:- As decided in Subhlakshmi Vanijya Pvt. Ltd., vs. CIT [2015 (8) TMI 174 - ITAT KOLKATA] Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order - notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases.
Limitation period for passing order is to be counted from the date of passing the order u/s 147 read with sec. 143(3) and not the date of Intimation issued u/s 143(1) of the Act, which is not an order for the purposes of section 263. In all the cases, the orders have been passed within the time limit.
CIT having jurisdiction over the AO who passed order u/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT.
Addition in the hands of a company can be made u/s 68 in its first year of incorporation. After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid.
Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day. Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given by the CIT.
Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act. - Decided against assessee.
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2015 (11) TMI 1802
Reopening of assessment u/s 147 - non independent application of mind by AO - addition u/ 68 - HELD THAT:- As relying on G & G PHARMA INDIA LTD. [2015 (10) TMI 754 - DELHI HIGH COURT] Reopening is bad in law as in this case the A.O. has not independently applied his mind to the information received so as to form an opinion that income chargeable to tax has escaped assessment in the case of the assessee. He has not stated as to how the material gathered by the Investigation Wing has nexus with the assessee. The report and the finding of the Investigations Wing have to be relied upon by the A.O. without any independent verification. Merely discussing the modus operandi will not lead the A.O. to form a reasonable belief that income chargeable to tax of the assessee has escaped assessment. Hence in my view the reopening of the assessment is bad in law. - Decided in favour of assessee.
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2015 (11) TMI 1801
Reopening of assessment u/s 147 - information received from the Director of Income Tax, (Inv.), New Delhi that the assessee had received accommodation entries - Non independent application of mind - HELD THAT:- After perusing the reasons records we find that the reopening is based entirely by making a reference to the information received from the investigation wing. The reasons are at best vague and the satisfaction of the AO is not based on any tangible material. The AO has mechanically issued notices u/s 148 on the basis of information received by him from the investigation wing of the Income Tax Department. Therefore, we are of the considered view that the AO has not applied his mind so as to give an independent conclusion that he had reason to believe that income had escaped assessment during the year under consideration.
Unless the basic jurisdictional requirement is satisfied, a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the circumstances and respectfully following the judgment of the Hon’ble High Court of Delhi in the case of Pr. Commissioner of Income Tax-4 vs. G&G Pharma India Ltd. [2015 (10) TMI 754 - DELHI HIGH COURT] we hold that the reopening of the case of the assessee for the assessment year is bad in law and we accordingly quash the reassessment proceedings. - Decided in favour of assessee.
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2015 (11) TMI 1800
Reopening of assessment u/s 147 - accommodation entries receipt - non independent application of mind by AO - HELD THAT:- In the case on hand, the assessee has submitted that it received ₹ 5 lakhs from M/s Zenith Estates Ltd. on 7.8.2004 vide cheque as advance against sale of property vide agreement on sale dt. 4.8.2004. This fact was recorded in the books of accounts of the assessee and the original return of income contained the audited accounts. This advance received was returned to M/s Zenith Estates Ltd. on 21.03.2009, consequent to cancellation of the agreement to sell. All these documents were with the Assessing Officer. In fact the assessee filed his objections also
Copies of all the documents were filed. In the reasons recorded, the Assessing Officer states that, the assessee has received credit of ₹ 5 lakhs and has not reflected it in the books of accounts. This is against the facts of the case. The AO also records that the assessee has accepted that it had taken an accommodation entry. This is also incorrect fact. This is not a case where the share capital is introduced by the company. The amount received as advance was returned.
The assessee in his letter dt. 7.12.2011 has specifically asked for the statements of Mr.D.N.Taneja and Shri SK Gupta and ledger account of Sh.G.Taneja and copy of appraisal report in the case of TDS proof. It was specifically stated that Shri DN Taneja was never associated with the assessee company. It is also specifically submitted that Mr.SK Gupta has not mentioned that he received ₹ 5 lakhs in cash in lieu of the cheque issued by Zenith Estates Ltd to the assessee.
AO has not independently apply his mind to come to a conclusion that income chargeable to tax has escaped assessment. Thus, the reasons recorded and consequent reopening of the assessment, in my view are bad in law. Hence uphold the statements of the assessee and quash the reopening of the assessment as bad in law. - Decided in favour of assessee.
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2015 (11) TMI 1799
Disallowance u/s. 43B(f) being provision made for leave salary/compensated absence as per actuarial valuation - HELD THAT:- As decided in own case [2014 (10) TMI 154 - ITAT MUMBAI] wherein direct the AO to allow the claim of provisions for leave salary - appeal are decided in favour of the assessee-company.
Disallowance u/s. 14A in respect of other expenses - HELD THAT:- We find that the AO has made disallowance u/s. 14A with regard to other expenses, that he had applied provisions of Rule 8D of the Rules. The Hon’ble Jurisdictional High Court has held that said Rule could be applicable from AY. 2008-09 only. In these circumstances, we are of the opinion that, in the interest of justice, the matter should be restored back to the file of the AO for fresh adjudication. He is directed to afford a reasonable opportunity of hearing to the assessee and decide the issue afresh. Ground No. 2 is allowed in favour of the assessee, in part.
Provision made for pension liability as per actuarial valuation disallowed - AR contended that the liability was disallowed without any basis, that the AO/FAA had not disputed the crystallization of the liability that the same was allowable - HELD THAT:- We find that the assessee had claimed deduction for the provisions made under the head pension liability, that the figure was arrived at as per the actuarial valuation. We are of the opinion that after the decision of Bharat Earth Movers, [2000 (8) TMI 4 - SUPREME COURT] the issue of crystallised liability has been decided conclusively by the Hon’ble Supreme Court. Decided in favour of the assessee .
Disallowance u/s. 40(a)(ia) towards provision made for expenses at the year-end as per best estimates - HELD THAT:- Assessee had made provisions but had not received the bills, that in the subsequent year the provisions made by it were offered for taxation. Considering these facts and following the orders of the Tribunal in the case of Mahindra & Mahindra Ltd. [2013 (9) TMI 522 - ITAT, MUMBAI] & Industrial Development Banking Company [2006 (7) TMI 248 - ITAT BOMBAY-H] we decide ground no. 2 in favour of the assessee.
Deduction u/s. 80IA ad 80IB on account of allocation of head office expenses - HELD THAT:- As decided in own case interest income earned by the 100%EOU and allocation of head office expenses of other division have been decided in favour of the assessee-company.
Depreciation of goodwill on acquisition of Madura Garments division on-going-concern-basis - HELD THAT:- As decided in own case [2013 (11) TMI 1241 - ITAT MUMBAI] we direct the AO to allow the claim of depreciation on Goodwill.
Exemption from taxable profits and to treat the same as capital receipt - HELD THAT:- We find that the assessee during the assessment proceedings had made the claim about sales tax exemption, relying upon the decision of Reliance Industries delivered by the Special Bench of the Tribunal [2003 (10) TMI 255 - ITAT BOMBAY-J ] that the AO and the FAA held that the amount in question was directly linked with the running and operation of the business. The FAA also held that claim was not made by filing a revised return. In our opinion for making a fresh claim before the appellate authority the assessee is not required to file revised return as held by the Hon’ble Bombay High Court in the case of Prithvi Brokers [2012 (7) TMI 158 - BOMBAY HIGH COURT] . However, the AO cannot accept a fresh claim without a revised return. The assessee had requested the FAA for relief. In our opinion the FAA was not justified to reject the claim on that ground.
Now, coming to the merits of the case as to whether the incentive received by the assessee could be treated as capital receipt or not we would like to mention that the assessee had made the claim relying upon the decision of the Special Bench in the case of Reliance Industries. We find that the matter had travelled to the Hon'ble Supreme Court and it was restored back to Hon’ble High Court [2009 (4) TMI 516 - BOMBAY HIGH COURT] with certain directions. Therefore, we are of the opinion that in the interest of justice, the matter should be restored back to the file of the FAA who would analyse the provisions of the scheme in light of the decision of the Hon’ble Apex Court
Sale of certified emission reduction(CER) - treated as revenue receipts and liable to tax and to treat the same as capital receipt not chargeable to tax - HELD THAT:- As relying on MY HOME POWER LTD. [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] assessee is carrying on the business of power generation. The carbon credit is not even directly linked with power generation. On the sale of excess carbon credits the income was received and hence as correctly held by the Tribunal it is capital receipt and it cannot be business receipt or income. In the circumstances, we do not find any element of law in this appeal.
Addition made on account of general expenses incurred on buy back of shares - Expenditure on issuance of bonus shares is revenue expenditure. See GENERAL INSURANCE CORPORATION [2006 (9) TMI 116 - SUPREME COURT]
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2015 (11) TMI 1798
Violation of terms of the lease-cum-sale agreement - agreement individually entered into with the Bangalore Development Authority (BDA) by constructing a multi-storeyed residential building on the plots allotted to them - whether the construction made by them is contrary to the plan sanctioned by the Bruhat Bangalore Mahanagara Palike (BBMP) and thereby violated the lease-cum-sale agreement with the BDA - HELD THAT:- On a plain reading of condition No. 4 of the lease-cum-sale agreement that it is breached or violated under three circumstances: (i) If the plot is sub-divided or (ii) If more than one building is constructed thereon for the purposes of human habitation or (iii) If an apartment whether attached to the building or not is used as a shop or a warehouse etc.
Plot is sub-divided - HELD THAT:- There is no allegation that either Sadananda Gowda or Jeevaraj have subdivided their respective plot. The allegation (though denied) is to the contrary, which is that they have amalgamated their plots. Assuming the allegation is substantiated, it can be said at best, that they have acted contrary to the letter dated 24th September, 2009 but there is no breach or violation of condition No. 4 of the lease-cum-sale agreement. The effect, if any, of acting contrary to the letter dated 24th September, 2009 has not been canvassed or agitated. In any event, the case set up by Nagalaxmi Bai is not of a violation of the letter dated 24th September, 2009 but of a violation of condition No. 4 of the lease-cum-sale agreement - Under these circumstances, frankly, we fail to understand how it has been found by the High Court that amalgamation of the two plots (assuming it to be so) is a breach or violation of the lease-cum-sale agreement. Be that as it may, factually there is no subdivision of the plots and to that extent there is no violation of condition No. 4 of the lease-cum-sale agreement.
If more than one building is constructed thereon for the purposes of human habitation - If an apartment whether attached to the building or not is used as a shop or a warehouse etc. - HELD THAT:- It is nobody's case that more than one building has been constructed on either of the plots or that the building or any part thereof is used as a shop or warehouse etc. Therefore, this need not detain us any further, more particularly since the buildings are not yet completely constructed.
The High Court was in error in coming to the conclusion that the buildings constructed on the two plots were not in accordance with the sanctioned plan. The buildings were and are still under construction and it is too early to say that there has been a violation of the sanctioned plan. No doubt there are some deviations as pointed out by the BBMP but that is a matter that can certainly be attended to by Sadananda Gowda and Jeevaraj on the one hand and the BBMP on the other. The mere existence of some deviations in the buildings does not lead to any definite conclusion that there is either a breach or a violation of condition No. 4 of the lease-cum-sale agreement or the building plan sanctioned by the BBMP - Undoubtedly, there are some deviations in the construction which will surely be taken care of by the BBMP which has categorically stated on affidavit that an occupancy certificate will be given only if the building constructed conforms to the sanctioned plan and the building bye-laws.
There is no good reason to uphold the order passed by the High Court allowing the writ petition and it is accordingly set aside.
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2015 (11) TMI 1797
Classification of services - Cargo Handling Service or not - HELD THAT:- The issue decided in the case of ITW INDIA LTD. VERSUS COMMISSIONER [2016 (2) TMI 845 - SC ORDER] where the cases remitted back to the CESTAT with a request to the President, CESTAT, to constitute a Larger Bench for deciding the issue involved.
Appeal allowed by way of remand.
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2015 (11) TMI 1796
Addition of prior period expenses, provisions for warranty expenses and non deduction of TDS under Section 40(a)(ia) - HELD THAT:- Commissioner of Income Tax (Appeals) decided the said three issues in favour of the Assessee and that order has been upheld by the ITAT by the impugned order - HAs regards the above three issues, the Court is satisfied that no substantial question of law arises.
TP Adjustment - Transactional Net Margin Method (TNMM) to the resale price method (RPM) as the most appropriate method (MAM) for the purposes of determination of the arms length price (ALP) - HELD THAT:- The Court sees no reason to interfere since the adoption of the RPM by the Assessee was indeed found to be the MAM by the Dispute Resolution Panel (DRP) itself.
AMP expenses - in view of the judgement of this Court in Sony Ericsson Mobile Communications India Pvt. Ltd. vs. Commissioner of Income Tax-III [2015 (3) TMI 580 - DELHI HIGH COURT] issue already stands remanded to the ITAT.
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2015 (11) TMI 1795
Renewal as also the appointment of District Government Counsel (Civil and Criminal) in the Subordinate Courts across the State of Uttar Pradesh - the Orders of the State Government terminating the appointment of District Government Counsel is quashed and further direction is given to State Government to reconsider their renewal - Section 24 of the Code of Criminal Procedure.
Vikramajit Sen, J.
HELD THAT:- The law pertaining to the appointment of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel was directly in issue before the Three-Judge Bench in State of U.P. v. Johri Mal [2004 (4) TMI 588 - SUPREME COURT] where the law has been comprehensively clarified - In Johri Mal, this Court perused the LR Manual as also the Code of Criminal Procedure and reiterated that the District Counsel stood professionally engaged; that the State Government was free to determine the course of action after being satisfied of their performance, and that the Courts must be circumspect in the exercise of judicial review on matters which fell within the discretion of the State Government, i.e. appointment of their counsel or advocates. This Court reiterated that the District Counsels do not enjoy the statutory rights with respect to the renewals of tenures and the State Government enjoyed the discretionary powers in this respect. The curial performance of the advocates should not be the sole criterion for their reappointment as District Counsel and that the State Government must be free to repose trust and confidence in the persons whom they choose to appoint as their advocates.
It is beyond cavil that it is in the interest of the dispensation of criminal justice that competent counsel possessing integrity should alone be appointed, since otherwise, there is a strong possibility of miscarriage of justice. In choosing them, the State will not only have to be satisfied of their forensic competence, but also that they are bereft of any criminal antecedents. This, however, does not mean that the persons presently discharging the duties of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel stand appointed to civil posts, thereby creating a right of continuity.
The correct approach is to ensure the competency of advocates being considered for appointment of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel. It seems to us that it would be an incorrect approach to start this process by considering the re-appointment or renewal of existing Government Counsels since that would dilute, nay, dissolve the discretion of the Government to appoint advocates whom they find trustworthy. The High Court has followed the second approach leading to the dissatisfaction of the State Government and their resentment that their realm of discretion has been eroded for no justifiable reason - Appeals allowed.
Abhay Manohar Sapre, J.
HELD THAT:- Keeping in view the authoritative pronouncement rendered in Johri Mal' case (supra), there does not arise any occasion to again examine the same issues more so when in these very proceedings though at the instance of some other persons, these issues had reached to this Court on previous occasions as mentioned by my learned Brother in the main judgment which also came to be decided by this Court.
Indeed the principles of "precedent" and "Stare Decisis" command us to follow the law laid down by this Court and more so when it was rendered by a Bench consisted of three judges.
Also, the High Court though dealt with the issues but as aptly put by my learned Brother in paragraph 15 "incorrectly" thereby calling our interference.
Thus, the fresh appointments to be now made keeping in view the apt observations made especially in the case of Johri Mal and what is held in main judgment.
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2015 (11) TMI 1794
Grant of exemption from property tax - Vires of Article 14 of Constitution of India - whether the grant of exemption from property tax under Sec.207 of the Kerala Panchayat Raj Act, 1994, to the buildings, used for educational purpose or allied purpose and its hostel buildings owned by the Government, aided or functioning with the financial assistance of the Government alone, in exclusion of similar buildings and hostels owned by other private management of self-financing Educational Institutions, is discriminatory and violative of Art.14 of the Constitution of India?
HELD THAT:- The matter in issue involved in the instant case falls exclusively in the domain of taxation and has no connection with the academic affairs. Therefore, the extent of enquiry is confined to the fiscal status of institutions only. What is the basis of the classification?
This classification is made, by granting exemption to the buildings owned or financed by the Government, on the basis that public money is utilised for the construction and maintenance of such buildings; whereas in the case of the buildings and hostels owned and maintained by private management of self-financing institutions, the public money has not been involved. Put it differently, this exemption is a privilege granted to the public money and it can be said that buildings and hostels constructed and maintained by using public money is exempted from payment of property tax and the people, as a whole, is the beneficiary of this exemption. If property tax is imposed on buildings and hostels owned by the Government, that amount also will be taken from the public fund. More importantly, exemption is given to the institutions, functioning under the administrative control of the Government and to which Governmental auditing of funds and expenditure is made compulsory; whereas , the case of self-financing institutions, such control and auditing of funds are absent.
Secondly, the expression 'self financing' itself shows that such institutions are having their own fee structure, which cannot be compared with fees of a Government College. Though, it is regulated and controlled by the above referred statute, it is much higher than that of Government Colleges, wherein a nominal fee alone is collected from the students and certain rooms are reserved for students from socially and economically backward classes, in the hostels owned by the Government - Self-financing Educational Institutions form a separate class, different from the Educational Institutions owned and financed or aided by the Government and the discrimination made under Sec.207(b) of the Panchayat Raj Act is marked by intelligible differentia.
Thirdly, it is the case of the petitioner that the petitioner's institution is also governed and regulated by the the Kerala Professional Colleges or Institutions (Prohibition of Capitation Fees, Regulation of Admission, Fixation of Non-exploitative fee and other measures to ensure equity and excellence in professional Education) Act, 2006 - The petitioner institution is not the creation of a statute; but the functioning of the institute alone is regulated by several statutes, covering different field of activity and the Kerala Professional Colleges or Institutions (Prohibition of Capitation Fees, Regulation of Admission, Fixation of Non-exploitative fee and other measures to ensure equity and excellence in professional Education) Act, 2006 is one among various such statutes and on that reason the self-financing Educational Institutions cannot be equated with the Educational Institutions owned and administered by the Government, having the privilege under Sec.207 of the Kerala Panchayat Raj Act, 1994. The concept of 'sovereign immunity' is the basis of this privilege of tax exemption granted to the institutions owned or aided and administered by the Government.
The case put forward by the petitioner fails in the test proposed by the petitioner himself - Petition dismissed.
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2015 (11) TMI 1793
TP Adjustment - Comparable selection - HELD THAT:- Assessee is a company incorporated under the provisions of the Companies Act, 1956 engaged in the business of software development, consultancy services and IT enabled services thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Compute profit u/s 10A before setting off of the losses of another unit - HELD THAT:- CIT(A) to compute profit u/s 10A of the Act, before setting off of the losses of another unit. The CITA), following the jurisdictional High Court decision in the case of CIT Vs M/s Yokogawa India Ltd. [ 2011 (8) TMI 845 - Karnataka High Court] As per section 72(2) unabsorbed business loss is to be fist set of and thereafter unabsorbed depreciation treated as current year’s depreciation under section 32(2) is to be set off. As deduction under section 10A has to be excluded from the total income of the assessee the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise. In that view of the matter, the approach of the assessing authority was quite contrary to the aforesaid statutory provisions and the Appellate granting the benefit of section 10A to the assessee. Hence, the main substantial question of law is answered in favour of the assesses
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2015 (11) TMI 1792
Broken period interest - HELD THAT:- Issue raised by the revenue in this appeal is now stands covered in favour of the assessee and against the revenue by various decisions and orders of the Tribunal rendered in assessee’s own case. See BRITISH BANK OF MIDDLE EAST [2001 (8) TMI 12 - SUPREME COURT]
Salaries paid to expatriate employees - HELD THAT:- Tribunal in assessee’s own case including the cases relied upon, we find that that the facts of the case relied upon by the assessee and case in hand are similar. The order relied upon by the assessee is dated 22.2.2006 and the present appeal pertains to the assessment year 1999- 2000, and even today the revenue could not bring any material contrary to constrain to take a different view. Therefore, respectfully following the order of the Tribunal in assessee’s own case, we allow Ground No.2 taken by the assessee.
Disallowance of fees paid to Master card and Visa towards services rendered by them - HELD THAT:- As relying on own case order has restored this issue to the file of the AO. Facts being the same, we have no other alternative but to following the said decision of the precedent laid down by the Tribunal. Accordingly, we restore this ground to the file of the AO for verification of the facts and fresh decision. Ground No.3 of assessee’s appeals is allowed for statistical purposes.
Payment to the Great Eastern Shipping Company Limited (GESC) - claim regarding depreciation rejected - HELD THAT:- We are of the considered opinion the expenditure incurred by the assessee for vacating the premises given to the tenant is a business expenditure and allowable as revenue expenditure. Therefore, we allow Ground No.4 in part.
Disallowing the loss in respect of replacement of shares of Zee Telefilms to a foreign Institutional Investors (FII) - HELD THAT:- No further transactions could be continued with respect of these shares. Thereafter Chase Manhattan Bank, who acted as the Global Custodians for EMGF raised a claim against the bank on the ground that the FII and the Global Custodians were not duly notified of the notices/objections as required under the Custody Agreement. In these transactions, Chase and EMGF suffered loss of 3.5. These client being reputed clients and to maintain dignity in the market, the assessee company paid this amount to them and claimed as business expenses. He contended that in such type of business whatever losses suffered by the bank is business loss and should be allowed as business loss. Therefore, the AO was not justified in disallowing this payment as business loss.
Addition of bonus point on credit cards - HELD THAT:- An identical issue had come up before the various forums/ Judicial authorities, and therein the Courts have decided this issue in favour of the assessee. Hence, this issue stands covered in favour of the assessee. Therefore, we do not find any infirmity in the order of ld.CIT(A). Accordingly, we confirmed his findings. Ground No.2 taken by the revenue is dismissed.
Addition made on account of Deferred Guarantee Commission - HELD THAT:- As decided in BANK OF TOKYO LTD. [1993 (5) TMI 172 - CALCUTTA HIGH COURT] Revenue's contention that the accrual of the entire commission is a point of time accrual is not tenable. The contesting submissions boil down to one question whether accrual is co-eval with the pay ability, the same may be payable but may not be apportionable until the happening of an event; in the present case the expiry of the period, for, the guarantee beyond the expiry date of the previous year the right to receive for unexpired period, for, the guarantee beyond the expiry date of the previous year remains in a suspense. It may or may not fructify into an actual right to receive for the subsequent period of the term of the guarantee as the sooner determination of the guarantee is a contingency not ruled out by the agreement. It is only upon certain conditions being fulfilled, viz., the guarantee running the full course or period of the debt guaranteed, that the right to the entirety of the commission can be said to have accrued.
Addition u/s 40(a)(i) - commission income paid to the outside parties - HELD THAT:- We find that the an identical issue has come up before the Tribunal in number of cases CREDIT LYONNAIS [2012 (12) TMI 640 - ITAT MUMBAI], ABU DHABI COMMERCIAL BANK LTD. & OTHS. [2013 (9) TMI 603 - ITAT MUMBAI] and the Tribunal in the above cited cases decided the issue in favour of the assessee. Before us, the ld.DR could not bring any material contrary to the findings of the Tribunal. Therefore, we have no other alternative but to dismiss the Ground No.8 taken by the revenue.
Loss made on the outstanding forward contracts - HELD THAT:- We find that the issue raised by the assessee stands covered by the decision of Hon’ble Supreme Court in the case of Woodward Governor India P. Ltd [2009 (4) TMI 4 - SUPREME COURT] as held the loss suffered by assessee on account of fluctuations of foreign exchange as on the date of Balance Sheet is an item of expenditure under section 37(1), allowed the mark to market loss in the case of equity index/stock future as an allowable loss
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2015 (11) TMI 1791
Non-appearance of the appellant's representative - notice sent by registered post has been returned by the Postal Authorities - HELD THAT:- None appeared on behalf of the assessee despite issue of notice by RPAD. The notice sent by registered post has been returned by the Postal Authorities with the remarks ‘No person by this name at this address. So, returned for the correct address.’ The defect memo issued to the assessee that Tribunal fee is paid short by ₹ 3,768/- has not been rectified. Thus, dismiss this appeal as not admitted by applying the ratio of the decision of the Tribunal in Commissioner of Income-tax vs. Multiplan India (P.) Ltd, [1991 (5) TMI 120 - ITAT DELHI-D] as held as there was no communication or information as to why the revenue chose to remain absent on that date Tribunal on the basis of inherent powers, treated the appeal filed by the revenue as unadmitted in view of the provision of Rule 19 of the Income-tax (Appellate Tribunal) Rules, 1963. - Decided against assessee.
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2015 (11) TMI 1790
TP Adjustment - international transactions entered into by the assessee with its associated enterprises in respect of export of finished goods and import of goods - MAM selection - TNMM method or CUP method - HELD THAT:- As relying on assessee's own case [2015 (7) TMI 1 - ITAT PUNE] we find no merit in the orders of authorities below in determining the arm's length price in respect of international transactions undertaken by the assessee for the year under consideration.
Transactions of exports, imports and payment of commission to agents are closely inter related and are part of single business activity of the assessee and the profit earned by the assessee is collective result of all these transactions and hence, it is impractical to analyse the profits of each individual transactions. Accordingly, the assessee has rightly aggregated the above transactions for the purposes of determining the ALP under TNMM. Even if the various transactions are evaluated independently, the net final result remains the same. The assessee has adopted TNMM for determining the ALP for the various transactions and the assessee had contended that its net operating margin is much higher than the comparable companies. This fact has not been disputed by the learned TPO since he himself has accepted that more than 95% of the exports and imports are at ALP as per the TNMM method. Accordingly, even if the various international transactions are evaluated separately, the final result remains the same. The assessee has adopted TNMM wherein the net operating margin of the assessee is compared with the net operating margin of the comparables. Once the net margin of the assessee is higher, it means that all the international transactions entered into by the assessee with its AEs are at ALP.
CUP method is not the most appropriate method in the case of the assessee since suitable adjustments are not possible to be made in respect of the above differences. So, the addition on this account is not justified. No adjustment is to be made for determining the arm's length price in respect of international transactions undertaken by the assessee for the year under consideration.
We direct the Assessing Officer to delete the said adjustment made in the hands of assessee on account of arm's length price of international transactions entered into by the assessee with its associate enterprises. Accordingly, we allow the ground of appeal Nos.4, 5, 6 and 7 raised by the assessee. The alternate plea raised vide ground of appeal Nos.8 and 9 are dismissed. In view of no addition being made in the hands of assessee, there is no merit in the ground of appeal No.10 raised by the assessee for granting the benefit of 5% as per proviso to section 92C(2) of the Act.
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2015 (11) TMI 1789
Disallowance of remuneration paid to working partners us 40(b)(v)(2) - Both the authorities below have deducted the same from book profits as well as remuneration to partners on the ground that the same is not business income resulting in the impugned section 40(b)(v)(2) disallowance -
HELD THAT:- There is no quarrel that assessee’s interest income has arisen from parking of surplus funds. AO treated this interest sum as business income in regular assessment framed on 21/07/2008. He has nowhere disturbed this crucial view and merely excludes the same from net profits in computing book profits as well partner’s remuneration.
A co-ordinate bench of the tribunal in Akshar Associates vs. ACIT [2015 (12) TMI 123 - ITAT AHMEDABAD] deleted identical disallowance by following hon’ble jurisdictional high court’s decision CIT vs. JJ Industries [2013 (7) TMI 577 - GUJARAT HIGH COURT] holding that for the purpose of ascertaining ceiling on the basis of book profits, the profit shall be that stated in P & L account. We draw support therefrom and conclude that assessee’s income cannot be notionally excluded for the purpose of determining allowable deduction of partner’s remuneration u/s. 40(b) - delete the impugned section 40(b)(v)(2) disallowance - Decided in favour of assessee.
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2015 (11) TMI 1788
Condonation of delay - delay of 2078 days - HELD THAT:- It is observed that in the identical facts and circumstances involved in the case of Magnum Export, the Coordinate Bench of this Tribunal has condoned a similar delay of 2078 days on the part of the assessee in filing its appeal for the similar reasons vide its order [2014 (1) TMI 435 - ITAT KOLKATA]. This decision of the Coordinate Bench of this Tribunal cited by the assessee thus is squarely applicable in the present case and this position is not disputed even by the D.R. at the time of hearing before us, we, therefore, condone the delay on the part of the assessee in filing this appeal before the Tribunal and proceed to dispose of the said appeal on merit.
Disallowance on account of assessee’s claim for deduction under section 80HHC - Issue relating to the assessee’s claim for deduction under section 80HHC has to go back to the AO for deciding on merit keeping in view the relevant provisions of the law as are finally applicable to the year under consideration. It is also observed that vide its order dated 08.02.2013 [2014 (1) TMI 435 - ITAT KOLKATA] passed in the case of Magnum Export, the Coordinate Bench of this Tribunal has also restored a similar issue to the file of the AO for deciding the same afresh after verifying the relevant facts from record and applying the relevant provisions of law. Set aside the impugned order of the CIT(Appeals) on this issue and restore the matter to the file of the AO for deciding the same afresh - Appeal of the assessee is treated as allowed.
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2015 (11) TMI 1787
Disallowance of interest u/s 14A r.w.r. 8D - recording no satisfaction with regard to the incorrectness of claim of the assessee having regard to the accounts of the assessee having no such evidence or material brought - HELD THAT:- Even though the AO has made the disallowance by relying on the provisions of section 14A but he did not comply with the conditions as stipulated in section 14A(2). He has not recorded any satisfaction with regard to the incorrectness of claim of the assessee having regard to the accounts of the assessee having no such evidence or material brought to my notice by the ld. D/R which may show that the AO has given a finding on the basis of accounts maintained by the assessee that he is not satisfied with the claim of the assessee.
Even the AO has not recorded the satisfaction as regards to the claim of the assessee. He is bound to compute the disallowance in accordance with such method as may be prescribed. In this regard it is the rule 8D which has been notified with effect from 24.03.2008. The assessment year involved is the assessment year 2009-10 - No whisper whatsoever by the AO or by the D/R that the AO has computed the disallowance by applying Rule 8d. - Decided in favour of assessee.
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