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Showing 101 to 120 of 1478 Records
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2016 (3) TMI 1388
Validity of reopening of assessment - assumption of jurisdiction by the Id AO u/s 147 - Addition towards income from house property - HELD THAT:- No mention of the Annexure or reference to any material found during the course of search or any statement recorded of the seller or the broker in reasons recorded by AO for reopening of assessment It is also not mentioned that on which date the alleged cash have been paid by the assessee and to whom. It is also not available that from whose possession this information was found and what he had to say on these details.
AO according to material available before us shows that based on the information received from the Investigation Wing notice u/s 148 has been issued. According to us the aforesaid reasons do not satisfy the requirement of section 147 as information referred to is very vague and without reference to any documents or statement. Even the Annexure which has been reproduced is not mentioned in the reasons, even otherwise this annexure cannot be considered as a material or evidence with prima facie shows or establishes a nexus which shows escapement of income. Further it is apparent that the AO did not apply his own mind to the information and examined either the builder or the broker on the alleged cash payment but accepted the information in a mechanical manner. Reopening is improper and illegal and therefore cannot survive. - Decided in favour of assessee.
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2016 (3) TMI 1387
Disallowance u/s 14A read with Rule 8D - assessee submitted that the disallowance made by the AO has far exceeded the total claim of expenditure in the P & L Account - HELD THAT:- As decided in assessee's own case for the AY 2008-2009 [2014 (1) TMI 1183 - ITAT MUMBAI] a reasonable allocation of expenditure has to be made which can be attributed to the income which is chargeable to tax particularly bank interest income as against dividend income.
We agree with the Ld Counsel’s argument and remand the matter to the file of the AO. We direct the AO to apply the said ratio to the facts of the present case and other decisions, if any, in force and decided the issue in accordance with law. - Decided in favour of assessee for statistical purposes.
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2016 (3) TMI 1386
Disallowance u/s 14A - indirect expenses of the dividend income - HELD THAT:- As noted that for A.Y. 2009-10 also, there is observation that the entire investment was made out of own funds and simply because the assessee had borrowed funds in the balance sheet does not mean that the assessee made investment out of borrowed capital. As further observed that the assessee made disallowance at the rate of 1%, which was considered to be towards lower side, therefore, the AO was directed to restrict the disallowance on account of indirect expenses at the rate of 5% of the dividend income and since the assessee had suomotu disallowed the Assessing Officer was directed to restrict the disallowance at ₹ 4,14,921/-. The ld. DR had also no objection to the aforesaid reasoning, if followed. - Appeal of the assessee is partly allowed.
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2016 (3) TMI 1385
Additional depreciation claim @ 50% - HELD THAT:- It is not in dispute that the assessee has installed the machinery during the earlier assessment year and the machinery installed is entitled for additional depreciation. However, the Assessing Officer restricted additional depreciation @ 10% since the machinery was used by the assessee for less than 180 days. The question arises for consideration is whether the balance 10% of the additional depreciation can be allowed during the year under consideration or not. This issue was examined by the Cochin Bench of this Tribunal in Apollo Tyres Ltd. [2014 (1) TMI 33 - ITAT COCHIN]. The Cochin Bench found that the additional depreciation can be allowed in the next year in case the same cannot be allowed in the earlier year.
Assessee is eligible for additional depreciation which was not allowed in the earlier year. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow the balance additional depreciation.
Computation of capital gains - ‘transfer’ u/s 2(47) - year of assessment - HELD THAT:- The physical possession of the property was handed over for carrying out the development activities. The assessee has also granted exclusive right to the developer to sell the property to various prospective purchasers. A bare reading of this agreement clearly shows that the assessee can get back 30% of the constructed area in lieu of 70% of the undivided share in the land given to the developer. Therefore, by way of an arrangement, the property was handed over to the developer for development. This kind of arrangement may not be ‘transfer’ under common law. However, Income-tax Act, 1961, specifically defines an arrangement between the parties as ‘transfer’ u/s 2(47) of the Act. This arrangement enables the developer to enjoy the property as its own or to sell the property as its own. Therefore, in view of this specific definition in sec. 2(47)(vi) of the Act, this Tribunal is of the considered opinion that there was a transfer of property during the year under consideration within the meaning of sec. 2(47) of the Act. Therefore, the capital gain has to be assessed only during the year under consideration. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.
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2016 (3) TMI 1384
Deduction u/s 10A - exclusion of telecommunication expenses incurred in foreign currency from the export turnover as well as from total turnover - HELD THAT:- Issue decided in ACIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is intended to provide incentives to promote exports. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover - substantial question of law framed is answered in favour of the assessee and against the revenue.
Negative working capital adjustment - HELD THAT:- No need for making any negative working capital adjustment when assessee does not carry any working capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable to the assessee. In view of this, we direct the TPO not to make negative working capital adjustment.
It is undisputed that the Assessee is also a captive service provider such as the Assessee in the case decided by the Adaptec (India) P. Ltd. [2015 (6) TMI 288 - ITAT HYDERABAD] and therefore making a negative working capital adjustment without appreciating the fact that the company does not bear any working capital risks, was not correct. There is no allegation in the case of the assessee that the assessee has used any borrowed fund for working capital or there is any risk of money lost in credit time provided to the customers. - Decided in favour of assessee.
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2016 (3) TMI 1383
Election of the RETURNED CANDIDATE - challenge on the grounds that the RETURNED CANDIDATE is guilty of commission of two corrupt practices falling under sub-sections (1) and (6) of Section 123 of the Representation of the People Act, 1951, i.e. (1) making appeal to the voters in the name of religion and bribery; and (2) incurring expenditure in contravention of Section 77 of the RP Act respectively - RETURNED CANDIDATE could not be served with the summons in the normal course by the High Court.
Whether the election petition was accompanied by an affidavit which is compliant with the requirement of statute under the proviso to Section 83(1)(c)?
HELD THAT:- When the appeals were argued before this Court on 20.08.2015, the ELECTION PETITIONER made a submission that two separate affidavits were filed along with the election petition and the High Court’s observation (supra) are based on an erroneous identification of the affidavit. The RETURNED CANDIDATE took a stand that there was no 2nd affidavit as alleged by the ELECTION PETITIONER in compliance with the proviso to Section 83(1) of the RP Act filed along with the election petition - The fact that the ELECTION PETITIONER chose to file yet another affidavit pursuant to the order dated 25.8.2014 is another circumstance sought to be relied upon by the RETURNED CANDIDATE in support of his submission that there was no second affidavit filed along with the election petition,
In the circumstances of the case, the inference such as the one suggested by the RETURNED CANDIDATE cannot be drawn because the ELECTION PETITIONER in his reply to the OR VII R 11 petition (specifically stating that he had filed an affidavit in Form 25 along with the election petition) took a stand by way of abundant caution that if the court comes to a conclusion that his affidavit is found to be defective for any reason, he is willing to file further affidavit to cure the defect. Unfortunately, the High Court took a shortcut without examining the question whether the affidavit at page nos.394- 395 satisfies the requirement of Form 25 and (without recording a definite finding in that regard) simply recorded a conclusion that the defect is curable and the same can be cured by filing an affidavit in the Form 25”.
Appeal dismissed.
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2016 (3) TMI 1382
Apart from unsecured creditors of transferor company no.2, meetings of all classes of persons / entities were dispensed with - The learned counsel for the petitioners further states that in so far as the meeting of the unsecured creditors of transfer company no.2 is concerned, the report of the Chairperson would show that 77.48% (in value) of the total unsecured creditors attended the meeting and cast their votes in favour of the proposed scheme.
HELD THAT:- Ms. Mudiam, who appears for the Regional Director and Mr. Rajpal Singh, who appears for the Official Liquidator says that they have no objection to the scheme being sanctioned.
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2016 (3) TMI 1381
Penalty levied under section 271E - violation of Section 269SS - reasonable cause to be entitled to the benefit of Section 273B - accepting and repayment of loan in cash in excess as permitted by law - HELD THAT:- As decided in P. MUTHUKARUPPAN VERSUS THE JOINT COMMISSIONER OF INCOME TAX, PONDICHERRY RANGE, PONDICHERRY [2015 (7) TMI 848 - MADRAS HIGH COURT] appellant having taken loan amount by cash in contravention of the provisions of Section 269SS and repaying the same by cash in contravention of the provisions of Section 269T, cannot seek the support of Section 273B. The appellant has not explained as to the urgency, compulsion or any other important circumstance for the breach and that too repeatedly. Taking into account the conduct of the assessee, the assessing authority, after giving repeated reasonable opportunities, finding no explanation whatsoever, was unable to exercise his discretion under Section 273B and accordingly imposed the penalty under Sections 271D & 271E of the Act.
Penalty orders confirmed - Decided against assessee.
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2016 (3) TMI 1380
Rectification u/s 254 - HELD THAT:- AO did not furnish any details as indicated in the order of the Tribunal, rather it called for details from the Petitioners, and in turn, by letter dated 14th October 2009 the Petitioners pleaded ignorance of the Trust. The Rectification Application filed by the Petitioners sought to rectify the aforesaid error apparent on the face of the order.
Impugned order does not deal with the aforesaid objection of the Petitioners and the order dated 31st October 2014 of the Tribunal passed under section 254(1) on the above issue. It is the Petitioners' case that there are such other glaring errors in the impugned order. However, looking at the entire controversy in the Petitions, it would be appropriate that the Petitions be disposed of finally at the stage of admission. This is particularly because the Petitions arise from an order rejecting the Rectification Application and admitting the Petition would unduly delay the proceedings.
Parties are put to notice that the Petitions are fixed peremptorily on 12th April 2016 at 3.00 p.m. at which stage it may be disposed of finally
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2016 (3) TMI 1379
Disallowance of expenses claimed as professional fees - application of provisions of sec. 40A(2)(a) - HELD THAT:- In the instant case the submission of the assessee that Shri Adiya Mitra Anand is not a person specified in sec. 40A(2)(b) has not been controverted. Hence the question of application of provisions of sec. 40A(2)(a) does not arise.
As pertinent to note that the agreement is between the assessee and Shri Aditya Mitra Anand and the assessee shall normally expect the quality professional services from him, i.e., any businessmen shall not be bothered as to how the professional assignment is executed so long as they were satisfied with the quality of service.
AO has not doubted about the genuineness of the expenditure, but was suspicious about the reasonableness of the expenditure. However, since the expenditure has been incurred by the assessee out of commercial expediency and since the payments have been made by the assessee in accordance with the agreed terms, it is not correct on the part of the AO to question the correctness of the decision taken by the assessee out of commercial expediency. Accordingly, we are of the view that the Ld CIT(A) was justified in deleting the impugned disallowance. - Appeal filed by the revenue is dismissed.
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2016 (3) TMI 1378
Revision u/s 263 - Low profit shown in the period subsequent to the survey - CIT enhanced the income - HELD THAT:- The Hon'ble Gujarat High Court in the case of CIT Vs. Amit Corporation [2012 (6) TMI 593 - GUJARAT HIGH COURT] held that where the Assessing Officer after detailed verification of record and making enquiries had framed assessment, the Commissioner of Income Tax cannot revise under section 263
The enhancement of income by the CIT is wholly unjustified because it is not pointed out in the impugned order as to what is the basis for enhancing the income and what more material was found during the course of survey against the assessee over and above the surrendered income of ₹ 1.05 crores, which would also show that the CIT has disbelieved the entire survey proceedings conducted against the assessee. AO took possible view on examination of record with which the CIT did not agree, it cannot be treated that assessment order was erroneous and prejudicial to the interests of the Revenue.
AO examined the details at assessment stage after calling for details from the assessee through questionnaire time to time. AO verified all the facts at assessment stage and completed the assessment in accordance with law after applying his mind. Mere fall in GP/NP is no ground to make addition against the assessee. Even if the books of account are rejected, it is not always necessary to make addition against the assessee. Therefore, the assessment order could not be treated as erroneous in-so-far as it is prejudicial to the interests of the Revenue - Decided in favour of assessee.
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2016 (3) TMI 1377
Validity of reopening of the assessment u/s 148 - valid approval accorded u/s 151 - As per assessee the approval for reopening of the assessment to the Assessing Officer was granted by the JCIT without stating the reasons and without application of his mind - HELD THAT:- It is not in dispute that the approval by the JCIT given to the reasons recorded by the Assessing Officer for reopening of the assessment for the Assessment Year 2006-07 was by writing below the reasons “yes I agree‟, there was no set out of brief reasons by the JCIT as to why he agreed with the reasons of reopening as stated by the Assessing Officer. Therefore, the approval granted by the JCIT for reopening of the assessment for the Assessment Year 2006-07 was not valid under sec. 151 of the Act. Hence, we quash the issue of notice under sec. 148 of the Act by the Assessing Officer for reopening of the assessment under sec. 148 of the Act and consequently, the assessment order passed, pursuant to such notice, is bad in law and hence, the same is annulled. - Decided in favour of assessee.
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2016 (3) TMI 1376
Violation of Takeover Regulations, 1997 - acquiring additional shares upto 5%, without making a public announcement - HELD THAT:- Admittedly, the additional shares have not been acquired through open market in normal segment on the stock exchange, but the said shares have been acquired by the appellants through off market. Thus, the acquisition of additional shares by the appellants cannot be said to be in compliance with the provisions contained in the second proviso to Regulation 11(2) of the Takeover Regulations, 1997.
Argument of the appellants that since the trading in the shares of the company were suspended during the relevant period, the appellants bonafide believed that the shares could be purchased through off market is without any merit, because, under the second proviso to Regulation 11(2) exemption from making open offer is available only if the acquisition is made through open market purchase in normal segment on the stock exchange and not by any other method. Therefore, if the trading in the shares of the company were suspended during the relevant period it could not be presumed that the appellants could acquire shares through off market. The language of the second proviso to Regulation 11(2) being clear and unambiguous, the appellants are not justified in contending that in the absence of trading in the shares of the company on the stock exchange, the appellants could acquire shares in the off market.
In the instant case, SEBI by misconstruing the provisions contained in Section 15H(ii) of SEBI Act, has erroneously imposed penalty of ₹ 25 lac by treating the above factors as mitigating factors.
In view of the decision of the Apex Court in case of SEBI vs. Roofit Industries Ltd.[2015 (11) TMI 1387 - SUPREME COURT] which holds that mitigating factors set out in Section 15J are not applicable to violations covered under Section 15H(ii) as it stood prior to September 8, 2014, we were inclined to remand the matter to enable SEBI to take corrective measures. However, counsel for SEBI was not in favour of remand and sought dismissal of the appeal. Thus, in the facts of present case, where penalty of ₹ 25 lac is imposed as against the imposable penalty of ₹ 25 crore, the appellants are not justified in contending that the penalty imposed is disproportionate to the violations committed.
On account of certain arguments advanced by the counsel for appellants which were inconsistent with the pleadings on record, we, on conclusion of arguments had declared that we are dismissing the appeal with costs quantified at ₹ 15,000/-.
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2016 (3) TMI 1375
Jurisdiction - power of Bar Council of India to prescribe an examination post enrollment of an advocate as a condition of eligibility for his continuing to practice at the Bar.
HELD THAT:- The questions that fall for determination are of considerable importance affecting the legal profession in general and need to be authoritatively answered by a Constitution Bench of this Court.
The matter is referred to a five-Judge Bench for consideration for determining the following questions:
(1) Whether Pre-enrollment training in terms of Bar Council of India Training Rules, 1995 framed under Section 24(3)(d) of the Advocates Act, 1961 could be validly prescribed by the Bar Council of India and if so whether the decision of this Court in Sudeer vs. Bar Council of India & Anr. [1999 (3) TMI 662 - SUPREME COURT] requires reconsideration.
(2) Whether a pre-enrollment examination can be prescribed by the Bar Council of India under the Advocates Act, 1961.
(3) In case questions Nos.1 and 2 are answered in the negative whether a post-enrollment examination can be validly prescribed by the Bar Council of India in terms of Section 49(1)(ah) of the Advocates Act, 1961.
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2016 (3) TMI 1374
Disallowance us 14A - not earning of any exempt income out of the investment - HELD THAT:- We find that undisputedly the assessee has not earned any exempted income. Now it is settled position of law that whenever assessee did not earn any exempt income, no disallowance could be made u/s. 14A of the Act.
The Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] has categorically held that section 14A envisages that there should be actual receipt of income which was not includible in the total income during the relevant previous year for the purpose of disallowing any expenditure in relation to the said income. Wherever there is no exempt income includible in the total income of the assessee, the provisions of section 14A cannot be invoked.
Thus when there is no exempt income, provision of section 14A of the Act cannot be applied. - Decided in favour of assessee.
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2016 (3) TMI 1373
Addition u/s 68 on account of commission - assessee failed to discharge its onus to prove the genuineness of the transactions - HELD THAT:- In the appellant's case scrutiny assessment u/s 143(3) was made on 28.02.2006. In the course of the said proceedings, the details of share application money / share capital were furnished vide its explanation dated 16.11.2005 which are available at pages 40 to 43 of the paper book furnished. Nothing adverse was found. The AO has not verified the details furnished by the assessee and I.T. records of the shareholders/investing companies. These facts were not controverted by the AO. The assessee has discharged its burden of providing basic details which were required for verification to fulfill the conditions viz. identity of the creditor, credit worthiness of the creditor and genuineness of transaction as laid down by higher judicial authorities for examining the issue is u/s. 68.
No interference is called for in the well reasoned order passed by the Ld. CIT(A) on the deletion of additions in dispute, hence, we uphold the same and dismiss the ground no. 1 raised by the Revenue in its Appeal.
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2016 (3) TMI 1372
Disallowing lease equalization charges debited to the Profit & Loss Account - HELD THAT:- We find that an identical issue had come up in the earlier years, wherein this issue has been sent back by the Tribunal to the file of the AO [ 2013 (11) TMI 64 - ITAT MUMBAI]
Disallowing the claim of assessee u/s 35D - HELD THAT:- In other years also, similar view has been taken by the Tribunal and this issue has been sent back to the file of the AO, therefore, in this year also, we find it appropriate to sent this issue back to the file of the AO and direct him to follow the directions given in the order of the Tribunal of earlier years and re-decide this issue after giving adequate opportunity of hearing to the assessee. Thus, this ground is allowed for statistical purposes.
Allocation of interest attributable to earning income u/s 10(23G) - HELD THAT:- We find that the issue involved in this year also requires re-look to ascertain the correct facts, and therefore, this issue is sent back to the file of AO. The AO is directed to follow the directions given in the order of the Tribunal of earlier years [2014 (12) TMI 881 - ITAT MUMBAI ] and he shall give adequate opportunity of hearing to the assessee to bring the correct facts on record.
Allocation of administrative expenses attributable to earning income u/s. 10(23G) - HELD THAT:- Issue involved in these grounds is identical to the issue involved in ground no.4 above. It is further noted by us that this issue has also been sent back by the Tribunal in the earlier year to the file of the AO for verification of facts. Therefore, respectfully following the order of the Tribunal of earlier years, we send this issue back to the file of the AO and direct him to follow the directions given in the order of the earlier years and re-decide this issue after giving adequate opportunity of hearing to the assessee. Thus, with these directions this issue is sent back to the file of the AO and these grounds may be treated as allowed for statistical purposes.
Deduction u/s. 80M - HELD THAT:- This issue has also been sent back by the Tribunal in A.Ys 1999-2000 to 2001-02 and also in A.Y 1998-99 for verifying the net worth of the assessee. Therefore, respectfully following the judgment of the Tribunal, we send this issue back to the file of the AO and direct him to follow the directions given in the orders of the Tribunal of earlier years and re-decide this issue after giving adequate opportunity of hearing to the assessee
MAT Computation - Disallowance of provision for diminution in the value of the securities while computing the book profit u/s. 115JB - HELD THAT:- No distinction has been made on facts by the parties, and therefore, respectfully following the judgment of the Tribunal in the earlier year, we send this issue back to the file of the AO and direct him to follow the directions of the Tribunal in its order given in the earlier year and re-decide this issue.
Addition made on account of club expenses - HELD THAT:- In this order [2015 (5) TMI 600 - ITAT MUMBAI] the Tribunal has decided this issue in favour of the assessee in principle, but restored it back for the limited purpose of verification.
Depreciation on leased assets - HELD THAT:- Allowability of depreciation on leased assets has now been settled in favour of the assessee by the decision of the Hon`ble Supreme Court in the case of ICDS Limited [2013 (1) TMI 344 - SUPREME COURT]
Addition made on account of provision for non-performing assets to the book profit u/s. 115JA - HELD THAT:- We decide this issue against the assessee and in favour of the revenue and hold that the provision for non-performing assets, being a provision for diminution in the value of the asset, is required to be added to the book profits. Thus, these grounds are treated as allowed in favour of the revenue.
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2016 (3) TMI 1371
Re-opening of assessment u/s 147 - basis of information received from State Bank of Surat about non-deduction of TDS - HELD THAT:- There is no details given by AO as to which the fact or material was not disclosed by the assessee which lead to escape assessment. Merely referring a bald assertion that “I have reason to believe that it is a failure of assessee part or not to add back the amount of ₹ 58,94,437/- to the total income u/s. 40(a)(ia) of the Act” is not sufficient to frame notice for re-opening concluded assessment beyond the four years. Thus the notice (impugned notice u/s. 48 is bad in law) and does not qualify a sustainable notice under the scrutiny of law, hence, the legal ground raised by the assessee is allowed and the re-opening of assessment is declared as invalid.
Disallowance on expenditure u/s. 14A and interest levied u/s 234D of Act. As we have already concluded that reopening of assessment is invalid, hence, the disallowances or additions or consequential interest made in the re-assessment order are became academic.
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2016 (3) TMI 1370
Maintainability of appeal - HELD THAT:- The appeal is admitted on the substantial question of law:- Whether the CESTAT was justified in holding that the adjudication order which was passed after the omission of section 3A of the Central Excise Act, 1944 is not sustainable despite the fact that the proceedings had been initiated prior to 01.03.2001?
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2016 (3) TMI 1369
Partition of ancestral property - right of grand-son in the properties of grand-father - birth right of grand son in the property or not - the property was ancestral and that no earlier partition between the brothers had in fact taken place - Section 8 of the Hindu Succession Act, 1956 - HELD THAT:- On the death of Jagannath Singh in 1973, the proviso to Section 6 would apply inasmuch as Jagannath Singh had left behind his widow, who was a Class I female heir. Equally, upon the application of explanation 1 to the said Section, a partition must be said to have been effected by operation of law immediately before his death. This being the case, it is clear that the plaintiff would be entitled to a share on this partition taking place in 1973. We were informed, however, that the plaintiff was born only in 1977, and that, for this reason, (his birth being after his grandfather’s death) obviously no such share could be allotted to him. Also, his case in the suit filed by him is not that he is entitled to this share but that he is entitled to a 1/8th share on dividing the joint family property between 8 co-sharers in 1998. What has therefore to be seen is whether the application of Section 8, in 1973, on the death of Jagannath Singh would make the joint family property in the hands of the father, uncles and the plaintiff no longer joint family property after the devolution of Jagannath Singh’s share, by application of Section 8, among his Class I heirs.
On the death of Jagannath Singh in 1973, the joint family property which was ancestral property in the hands of Jagannath Singh and the other coparceners, devolved by succession under Section 8 of the Act. This being the case, the ancestral property ceased to be joint family property on the date of death of Jagannath Singh, and the other coparceners and his widow held the property as tenants in common and not as joint tenants. This being the case, on the date of the birth of the appellant in 1977 the said ancestral property, not being joint family property, the suit for partition of such property would not be maintainable.
Appeal dismissed.
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