Contempt petition - punishing the respondent for wilful disobedience of the order - HELD THAT:- Since the writ petition, namely, W.P. No. 34238 of 2016 itself has been withdrawn by the petitioner today, the contempt petition stands closed.
Summary: The High Court of Madras dismissed a writ petition as withdrawn upon the petitioner's request. No costs were awarded. (2018 (12) TMI 1916 - MADRAS HIGH COURT)
Entitlement to deduction u/s 80P(2)(a)(i) - nature of business of assessee - petitioner in appeal is a co-operative society engaged exclusively in providing credit facilities to its members - HELD THAT:- In order to determine the nature of business as to whether the same is of a cooperative bank or not, certificate from RBI about the nature of business of the assessee is most important and hence, we feel it proper to restore back the matter to the file of AO for fresh decision after providing adequate opportunity to the assessee to produce such certificate from RBI regarding the nature of business of the assessee in reasonable time.
As noted in CITIZEN COOPERATIVE SOCIETY LIMITED [2017 (8) TMI 536 - SUPREME COURT] the assessee was engaged in the activity of granting loans to general public as well. This was also noted in the same Para that most of the business of the assessee was with the second category of persons who were noted to be nominal members and from them, the assessee was getting deposits which were kept in Fixed Deposits with a motive to earn maximum returns and a portion of these deposits was utilized to advance gold loans etc. to members of the first category i.e. ordinary members. Hence, even if it is found that assessee is not a co-operative bank, then also, this factual aspect of the present case should be compared and thereafter final decision should be made. Appeal filed by the assessee is allowed for statistical purposes.
Seeking removal of Resolution Professional - order of liquidation has been passed u/s 33(1)(a)/34(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- No ‘resolution plan’ was approved by the ‘committee of creditors’ and in the meantime 270 days having lapsed on 5th of September, 2018, the ‘Resolution Professional’ filed a miscellaneous application for liquidation, which is accepted and order of liquidation has been passed. On such order, as the ‘committee of creditors’ ceased to exist and become functus officio even if we set aside the impugned order dated 31st October, 2018 and remove Mr. V. Nagarajan, the order of liquidation cannot be declare illegal as more than 270 days having passed. Thus, no relief can be granted.
Disallowance of payment of Gratuity to the employees - application for approval of gratuity scheme pending - HELD THAT:- The assessee has paid a submission that its application for the approval for the gratuity trust with life insurance Corp of India is pending since 12/02/2013. Several reminders have been placed on record before us submitted to the principal Commissioner of income tax. However, till to date the above trust has not been registered. In such peculiar circumstances where assessee has already done what he could have done and still facing disallowance for no approval of the about trust which is according to the standard format with life insurance Corp of India. In such circumstances, we do not inclined to uphold the disallowances made by the lower authorities despite the fact that approval has not been granted to the gratuity trust of the assessee as per the standard deed entered into with life insurance Corp of India.
We set aside this ground of appeal back to the file of the learned assessing officer with a direction to the learned AO and the concerned CIT to examine the application of the assessee and if it is found in accordance with the law to grant the registration so that assessee can get the deduction of the expenditure which assessee is rightfully incurring for the gratuity of the employees of the company. - Appeal of the assessee is allowed for statistical purposes.
Deduction u/s 80P - interest income earned from Co-operative banks - Nexus between expenditure factually incurred to earn income of dividend - HELD THAT:- We find that there is not direct specific or definite expenditure factually incurred to earn income of dividend and or intent from investments with other co-operative societies eligible for deduction u/s.80P(2)(d) of the Act. hence, the action of the AO in assuming expenditure alleged to have incurred or deemed to have incurred for earning dividend, without bring any evidence or record to prove the nexus between expenditure disallowed and dividend/interest income earned from investment with other co-operative societies in wholly arbitrary imaginary, hence, not sustainable in law. It is seen that the assessee has been statutorily investing its surplus fund from the year 1992 with other co-operative societies including co-operative banks. On such investment, the assessee is receiving interest and dividend which has been claimed as deduction u/s.80P(2)(d) of the Act. It is evident that there is no direct nexus between such expenses and interest and dividend.
The prorate allocation of interest expenditure resulting its part disallowance of deduction has been done without examined the issue in details. Therefore, in absence of any expenses directly or indirectly co-related to such income, the part disallowance of deduction is not satisfied. In view of this matter, we do not find any fault in the order of CIT(A), hence, same is upheld.
Claim of deduction u/s. 80P(2)(d) of the Act on the interest income earned from Co-operative banks - The assessee is a Credit Co-operative Society and received advances and loans from its members, on which interest was being received and paid. We find that the Surat Bench of the Tribunal (camp at Surat), on the similar issue, in assessee's own case [2017 (4) TMI 1545 - ITAT SURAT] for the A. Y. 2009-10 held the issue in favour of the assessee .
We find that there is no direct nexus between expenditure related to part disallowance, hence, findings of CIT(A) are upheld. It is further apparent that the assessee is entitled to deduction u/s.80P(2)(d) in respect of the interest income earned from Co-operative Societies are eligible for deduction. Therefore, we do not find any infirmity in the order of ld. CIT(A), and we upheld the same, accordingly, the above ground Nos. 1 to 6 raised by the Revenue are dismissed.
Calling for the records on the file of the fourth respondent - vires of notification issued by the Government of Tamil Nadu in G.O.Ms.No.149, dated 12.10.2009 - HELD THAT:- The petitioner has to approach the revisional authority and seek remedy under Section 57 of the TNVAT Act - It is open to the Writ Petitioner to file revision petition before the revisional authority within a period of three weeks from the date of receipt of a copy of this order.
If such revision petition is filed, the revisional authority shall consider the said revision petition and pass appropriate orders on merits and in accordance with law, and by also taking note of the order already passed by the Joint Commissioner (CT) Salem, dated 05.06.2010.
Taking note of the order of interim stay, the impugned order shall be kept in abeyance till the decision is taken by the revisional authority, in the event of the petitioner filing the said revision petition within the said time - Petition disposed off.
Reopening of assessment u/s 147 - Addition of bogus purchases - CIT(A) restricted profit element involved in its modus operandi at 12.50% of the alleged bogus purchases - HELD THAT:- According to the formation of belief, the assessee has availed unsecured loans from concerns of Shri Bhanwarlal Jain. However, while passing assessment order, it revealed to the AO that loans were not availed by the assessee. The assessee in its objection has been contended that he has no concern with Shri Bhanwarlal Jain. He is a commission agent who purchased and sold goods on behalf of principal on commission basis and account only commission in the profit & loss account. AO has neither transmitted the information received by him to the assessee nor considered while disposing of the objection filed by the assessee.
As before the ld.CIT(A), the assessee has raised specific objection about formation of belief vis-à-vis information available to the AO. CIT(A) has also not dealt those objection of the assessee. CIT(A) observed that AO got information from the investigation wing, Mumbai indicating that the assessee was beneficiary of accommodation entry from entry operators. In our opinion, this is a general statement instead of considering exact nature of issue contested by the assessee. The assessee has contended that reopening was made on account of availing unsecured/unexplained loans, whereas the addition was made on account of bogus purchases. There is a vast difference in-between both these aspects. CIT(A) has not dealt with this aspect. Therefore, we are of the view meaning of expression “and also” employed in section 147 of the Act, reopening of the assessment in the present case is not sustainable. We allow this ground of appeal and quash the reassessment order - Decided in favour of assessee.
Rejection of books of account - estimation of profit - AO rejected books of account on the basis of lower gross profit rates - HELD THAT:- As decided in own case [2018 (9) TMI 145 - ITAT LUCKNOW] neither the Assessing Officer nor the ld. CIT(A) has conducted any independent enquiry regarding the same and just on the basis of guess work has observed that assessee is not bringing out full particulars. Even the judicial pronouncements are clear on the facts that in the nature of trade as like assessee, cash memos for day-to-day sales are not required and that a consolidated entry in the cash book along with relevant documents of purchase of liquor are sufficient to prove the genuineness. In this view of the matter, we hold that the ld. CIT(A) was not justified in confirming the rejection of the books of account and adopting the G.P. rate on the higher side - Decided in favour of assessee.
Addition u/s 68 - Deposit by one of the members of the assessee AOP - one new member had introduced capital in cash - CIT(A) upheld the addition by holding that PAN, address and assessment particulars were not furnished before the Assessing Officer - HELD THAT:- As we find that copy of confirmation of account along with the copy of ITRs from assessment year 2008-09 to assessment year 2013-14 are placed. CIT(A) was not justified in confirming the addition made by the Assessing Officer. Accordingly, the addition made by the Assessing Officer and confirmed by the learned CIT(A) is deleted. - Decided in favour of assessee.
Summon by bailable warrants - only prayer is that since arrest warrants have been issued in complaint registered in 2013 which was kept pending by the Enforcement Directorate till 2017 and formal complaint was filed on 21.09.2017 - HELD THAT:- Considering the fact that the matter was kept pending for four years by the Enforcement Directorate and petitioners were not arrested, it is deemed proper to direct the Court to summon the petitioners No.3 to 5 by bailable warrants instead of arrest warrants.
The criminal revision is, accordingly, dismissed as withdrawn with the directions to the Court to summon the petitioners No.3 to 5 by bailable warrants in place of arrest warrants - Petitioners No.3 to 5 are directed to appear before the concerned Court on or before 15.12.2018. Arrest warrants be not executed.
Availing of intellectual services for marketing the products of the complainant - non-payment of amount due and payable under the agreement - HELD THAT:- The learned High Court has not committed any error in quashing the criminal proceedings initiated by the complainant. Even considering the allegations and averments made in the FIR and the case on behalf of the Appellant, it cannot be said that the ingredients of Sections 406 and 420 are at all satisfied. The dispute between the parties at the most can be said to be the civil dispute and it is tried to be converted into the criminal dispute. Therefore, continuing the criminal proceedings against the Accused will be an abuse of process of law and, therefore, the High Court has rightly quashed the criminal proceedings. Merely because the original Accused might not have paid the amount due and payable under the agreement or might not have paid the amount in lieu of one month Notice before terminating the agreement by itself cannot be said to be a cheating and/or having committed offence Under Sections 406 and 420 of the Indian Penal Code as alleged.
The High Court has rightly exercised the powers Under Sections 482 of the Code of Criminal Procedure and has rightly quashed the criminal proceedings - Appeal dismissed.
Release of detained goods - black pepper (kali mirch) - cardamom - Prohibited goods or not - Section 110A of the Customs Act, 1962 - HELD THAT:- The seizure order nowhere in specific terms make any averment that the goods which are being seized and detained are of third country (foreign origin) which were brought into Nepal and now are being imported in India.
Parties are directed to exchange pleadings within three weeks - List for admission/final disposal immediately thereafter.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Assessee’s own funds are more than the investment as explained above in Para 4 of this order. We have gone through the entire facts regarding available of funds and noticed that the presumptions as held by Hon’ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] is in favour of assessee because the Revenue could not establish any nexus with the expenses claimed by assessee vis-à-vis exempt income. In the absence of the same, the presumptions in favour of assessee and hence, we delete the addition. As delete the addition on the issue of satisfaction. Once, the addition is deleted on the issue of satisfaction, nothing will remain even on administrative expenses. This issue of assessee’s appeal is allowed.
Adjustment made by TPO on account of guarantee commission u/s 92C - HELD THAT:- As the issue is squarely covered in favour of assessee, wherein guarantee commission is to be charged at 0.5% as bench mark by the assessee, we are of the view that no further adjustment to determine the ALP is to be made. This issue of assessee’s appeal is allowed.
Disallowance of professional fee treating it as a capital expenditure - HELD THAT:- We do not agree with this contention of the appellant since any expenditure relating to issue of securities is capital in nature. In case of Brooke Bond India Ltd. [1997 (2) TMI 11 - SUPREME COURT] it was held by Hon’ble Supreme Court that expenditure incurred for issue of shares, is capital in nature and hence not allowable u/s. 37(l) of the IT Act. Similar observations were made by Hon'ble Apex Court in Punjab State industrial Development Corporation [1996 (12) TMI 6 - SUPREME COURT]
PE in India - Whether Tribunal was justified in remanding the matter back to Assessing officer for fresh consideration when the Assessing Officer had not discharged the burden of proving that the appellant had a PE in India? - HELD THAT:- It is agreed position between the parties that the appellant being aggrieved by the above order of the Tribunal [2015 (5) TMI 760 - ITAT MUMBAI] had preferred appeal to this Court [2018 (9) TMI 231 - BOMBAY HIGH COURT]. The above appeals were disposed of by this Court by setting aside the order of the Tribunal dated 1.4.2015 to the extent it had remanded the issue of permanent establishment to the assessing officer for fresh adjudication.
It is an agreed position between the parties that the above decision dated 29.8.2018 of this Court in Income Tax Appeal No. 1198 of 2015 & other appeals will equally apply to this appeal. Thus, the common impugned order dated 21.2.2017 of the Tribunal for A.Y. 2004-05, 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 is quashed and set aside. The appeals are restored to the Tribunal, for final disposal on the question Permanent Establishment in accordance with law.
Dishonor of Cheque - acquittal of accused - rebuttal of presumption - Legally enforceable debt - defence of the accused is that said cheque was issued for security in a previous loan transaction, however, the same was misused by the complainant - Section 138 of the N.I. Act - HELD THAT:- In the absence of any other material, merely because the proforma date on the cheque leaf shown the same to be of the decade 1990 by that itself it cannot be concluded that the cheque was issued in the said decade, but not the written date mentioned upon it. Further, it is also not the case of the accused that the cheque issued in 1990s cannot be used in the year 2007 by the customer.
Consequently, the cheque in question has been dishonoured with the shara "since account stands closed" would not entitle the accused to claim that guilt against him for the offence punishable under Section 138 of the N.I. Act, has not been proved. Since the trial Court without appreciating the materials placed before it in its proper perspective, has erroneously held that the complainant has failed to prove his capacity to lend and which finding has led the trial Court in pronouncing the judgment of acquittal, the same deserves to be set aside and has to be held that the complainant has proved beyond reasonable doubt that the accused has committed the offence punishable under Section 138 of the N.I. Act.
The judgment of acquittal is set aside - appeal allowed.
Liquidation of the Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (in short, 1&B Code, 2016) read with Rule 11 of the National Company Law Tribunal Rules, 2016 - HELD THAT:- It is stated by the Resolution Professional that in the final Meeting of the CoCs held on 02.05.2018, the CoC has made discussion and deliberation regarding the viability of a revival of the Corporate Debtor and found the same to be negative since the Corporate Debtor which is an Aviation Company, neither had an Aircraft nor a License from DGCA and under such circumstance, pumping of investment towards hiring an Aircraft was commercially unviable. Therefore, the CoCs unanimously has passed a Resolution inter-alia for Liquidation of the Corporate Debtor.
The CoC has agreed to the request of one of the suspended Directors of the Corporate Debtor and conveyed its decision to liquidate the Corporate Debtor by duly including and treating the land owned by the personal guarantors and mortgaged to the Financial Creditor as an asset vested with the Corporate Debtor.
This authority orders for liquidation of the Corporate Debtor viz., M/s. Air Carnival Private Limited. - Application allowed.
Income accrued in India - Centralized services fee received by the appellant for rendering various marketing, advertisement & other services to customers in India - whether taxable as “Fees for Technical Services” (FTS) in terms of Section 9 of the Income Tax Act, 1961 as well as Article 12 of the India US Double Taxation Avoidance Agreement (DTAA) - HELD THAT:- This Tribunal not only in the earlier years in the case of group concern, but also in assessee’s own case for the assessment year 2010-11 has decided this issue following the judgment of Hon’ble Delhi High Court in the case of DIT vs Sheraton International Inc. . Thus respectfully following, the judgment of the Tribunal which has been affirmed by the Hon’ble Delhi High Court also, holding that the, issue in question, is covered by the ruling of this court in the case of DIT vs. Sheraton International Inc [2009 (1) TMI 27 - DELHI HIGH COURT]
Thus, respectfully following the binding judicial precedents in the earlier year, we hold that the payment received by the assessee from the aforesaid services is not taxable in India as FTS, either in terms of section 9 of the Income Tax Act, 1961 or under Article 12 of the India US DTAA. Accordingly, the appeal of the revenue is dismissed.
Revision of assessment - cross-examination of other end dealers - Section 81 of the TNVAT Act, 2006 - HELD THAT:- When the petitioner's concluded assessment is sought to be revised on the strength of the returns filed by the other end dealer and the petitioner wants to cross examine the other end dealer also, it is the duty of the assessing officer to make him available. Section 81 of the TNVAT Act, 2006 confers all the powers conferred on a court by the Code of Civil Procedure, 1908, for the purpose of summoning and enforcing the attendance of any person and examining him on oath or affirmation; and compelling the production of any document. Section 81 of the TNVAT Act, 2006 does not merely confer a power. It is coupled with a duty also.
In this case, the respondent miserably failed to exercise the said statutory power given to him. The assessing officer ought to have done a cross verification with the other end dealer and also made an enquiry with the other end dealer.
The matter is remitted to the file of the respondent to pass orders afresh in accordance with law - Petition allowed by way of remand.
Existence of Permanent Establishment/Business connection in India - Taxability of business Income earned in India, by company incorporated outside India - DTAA between India and Switzerland - HELD THAT:- As decided in own case [2015 (4) TMI 905 - ITAT MUMBAI] assessee does not have any business connection in India in the light of Explanation-2 to Section 9(1) of the Act. The assessee does not have PE in India. The facts on record show that there is neither Service PE nor Agency PE in the form of SESIPL. Considering the facts in totality in the light of the relevant provisions of the law and DTAA and the judicial decisions referred to herein above, we have no hesitation in setting aside the assessment order and accordingly we direct the AO not to treat the income of the assessee as taxable under the Act. - Decided against revenue.
Non-granting of credit for tax deducted at source (TDS) as claimed in the revised return of income and non-computing of interest u/s 234B - HELD THAT:- Since these matters are factual and required verification on account of non-verification of the revised return of income as well as calculation of interest in accordance with law, therefore, we set aside the finding of the AO on these issues and restored of the matter afresh before the AO to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law.
Disallowance of the expenses - Assessee contented that CIT(A) ought to have deleted the disallowances in toto rather than restricting them to 10%, again on adhoc basis, without any defect having been pointed out in the claim of the assessee - HELD THAT:- It is settled law that where the taxing authorities do not point out any defect in the claim of the assessee, nor are the books of account maintained by the assessee rejected, no such ad-hoc disallowance at a whimsical figure can be made and the claim of the assessee requires to be accepted as such. See ALLIED CONSTRUCTION. [2005 (10) TMI 227 - ITAT DELHI] and SUBHASH CHAND AGRAWAL [2013 (11) TMI 471 - ITAT ALLAHABAD]
Thus the grievance of the assessee is found to be justified. It is accepted as such. The additions made are, hence, deleted in their entirety. - Decided in favour of assessee.
9911796707
