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Showing 101 to 120 of 1653 Records
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2017 (4) TMI 1557
Disallowance u/s 14A r.w.r.8D - assessee argued 'appellant' has no income which is claimed as exempt and therefore, legally no disallowance under section 14A is warranted - HELD THAT:- We find that it is an undisputed fact that the assessee has not earned any dividend or any kind of exempt income during the year. Whence there is no exempt income claimed by the assessee, then the ratio laid down by the Hon’ble Jurisdictional High Court in Cheminvest Ltd. vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT] that if the assessee has not earned any exempt income or when there is no actual receipt of any income which does not form part of the total income, no disallowance u/s 14A can be made, is clearly applicable here. We therefore, hold no disallowance u/s 14A can made in this year, because, admittedly there is no exempt income earned by the assessee in this year. - Decided in favour of assessee.
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2017 (4) TMI 1556
Disallowance of deduction u/s 80IC - manufacturing got done by outside parties - denial of deduction on sale of products to the extent of profits relating to manufacturing which was got done through outside parties - HELD THAT:- It is not essential for the assessee to carry out the entire manufacturing itself for the purpose of claiming deduction on the profits earned thereon and even if a part of activities were outsourced or for that matter, even if the whole manufacturing activities were outsourced but carried on under the supervision and control of the assessee, it would still tantamount to manufacturing activity being carried out by the assessee itself, making it eligible to claim deduction of profit earned thereon. The ITAT, thereafter applying the said legal proposition to the facts of the case as per which the assessee carried out all the processes involved in the manufacturing of S.S. Flats except one and the final product, in any case, was manufactured by the assessee itself and further that the process outsourced was as per its specification and requirement,held that in such circumstances, the only conclusion which could be drawn was that the product had been “manufactured”by the assessee. It was, therefore, held that in view of the same, there was no question of denying the assessee the benefit of deduction of its eligible profits under section 80IC
Since the facts in the present case are identical to that in the case of M/s Jaiswal Metals Pvt. Ltd. [2017 (2) TMI 1498 - ITAT CHANDIGARH] the decision rendered therein squarely applies to the present case also, following which we hold that the assessee is entitled to deduction of its entire eligible profits u/s 80IC - The addition, therefore, made is directed to be deleted.- Decided in favour of assessee.
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2017 (4) TMI 1555
Assessment u/s 153A - Addition of remission of foreign currency term loan - whether there is scope of assessment u/s. 153A of the Act in respect to completed assessment which is limited only to undisclosed income and undisclosed assets found during the course of search or not? - HELD THAT:- The regular assessment under s. 143(3) of the Act had been completed as per order dated 22.03.2007 of the AO. Therefore, it follows that as on the date of search, there was an assessment completed on the assessee under section 143(3) of the Act and in the said order there is no addition/ disallowance regarding the remission of foreign currency term loan, subsequently, the A.O. initiated proceedings under s. 153A.
As in the assessment completed under s. 143(3) r.w.s 153A, the A.O. has brought to tax a sum being the principal amount of loan waived by the lender without any incriminating material found during the course of search. Once this is the position the issue is clearly covered in favour of assessee and against the Revenue by the decision of Continental Warehousing Corporation (Nhava Sheva) Ltd.[2015 (5) TMI 656 - BOMBAY HIGH COURT]. Respectfully, following the same and in the given said of facts, we are of the view that this principal amount waived by the lender could not be added. Accordingly, we confirm the order of CIT(A) deleting the addition and dismiss this issue of Revenue’s appeal.
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2017 (4) TMI 1554
Levy of sales tax - vires of Section 1(2)(b) of the Tamil Nadu Value Added Tax (5th Amendment) Act, 2013 - effect of the amendment bought by this section, retrospective or prospective - HELD THAT:- The demand is on account of the retrospective operation of the statutory provision pursuant to the 5th Amendment Act, 2013. In the light of the new notification of the Government dated 21.04.2015, the demand made on the petitioner is unsustainable.
Petition allowed.
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2017 (4) TMI 1553
Clandestine Removal - refusal to sustain levy of penalty - distinction between penalty that could be levied on clandestine removal of goods and penalty that could be imposed for non-maintenance of accounts - HELD THAT:- The mere fact that the assessee had not challenged the penalty for non-maintenance of accounts does not ipso facto amounts to an admission as to clandestine removal of goods. Therefore, the Tribunal was justified in holding that the onus of proof regarding clandestine movement is on the Revenue which attempts to impose a penalty.
The decision of the CESTAT affirming the decision of the Commissioner (Appeals) is in accordance with law. No substantial question of law arises for determination in this appeal at the instance of the Revenue - Appeal dismissed.
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2017 (4) TMI 1552
Adjustment for differences in working capital levels - HELD THAT:- There is a positive working capital as seen from the balance sheet submitted by the assessee. Accordingly, we remit the issue to the file of AO to grant suitable working capital adjustments after making proper TP study. Hence, this ground is allowed for statistical purposes.
Recovery of advances written off as an operating item in computing the operating profits for benchmarking transactions - HELD THAT:- As relying on LOGICA PRIVATE LTD. [2015 (3) TMI 401 - ITAT BANGALORE] we remit the issue to the file of AO for the purpose of excluding recovery of advance written off from operating profit and to compare ALP. Hence, this ground raised by the assessee is allowed.
Disallowing an adjustment in respect of the extraordinary foreign exchange loss suffered by the appellant as against the comparable companies - HELD THAT:- As per MOTONIC INDIA AUTOMOTIVE PVT. LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV (3) , CHENNAI [2016 (8) TMI 1423 - ITAT CHENNAI] this issue is remitted to the file of AO for considering the same afresh in the light of above Order of Tribunal.
Applying the comparability criterion inconsistently for different companies and erred in considering companies as comparable, even when they fail the comparability criterion - HELD THAT:- We find force in the argument of ld.D.R that the sales details are not made available to TPO. Hence, the TPO considered it as compared to the assessee’s case. In the case of M/s.Nitin Fire Protection Industries Ltd., the major income is included from project related activity. It cannot be compared to the assessee’s case. Accordingly, we direct the AO to exclude the M/s.Nitin Fire Protection Industries Ltd. from the comparables and decide accordingly.
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2017 (4) TMI 1551
Interest earned on deposits made in the pre-operative period - income from other sources - addition made to the taxable income of the assessee - HELD THAT:- We are of the view that the issue is covered against the assessee by various orders of the ITAT, Chandigarh bench in the case of the assessee itself. The latest order of 7th December 2016 has been placed on record in which the Tribunal, following earlier orders in the case of the assessee, has decided the issue against the assessee. No distinguishing facts have been brought to our notice nor any error pointed out in the order of the CIT (Appeals) in following the order of the Tribunal in the case of the assessee. The Ground of appeal No.1 raised by the assessee, therefore, we hold has no merit. The same is accordingly dismissed.
Treating the miscellaneous income as income from other sources - HELD THAT:- We are in agreement with the Ld. CIT (Appeals) that though the assessee has contended that the said receipts are incidental to the construction of the project and by virtue of the proposition laid in the case of CIT vs Bokaro Steel limited [1998 (12) TMI 4 - SUPREME COURT] the same should be treated as its business income and deducted from the preoperative expenses incurred by I.T.A.T., at the same time we find that no evidences to substantiate the submissions have been filed either before the lower authorities or even before us. In view of the same we have no option but to concur with the Ld. CIT (Appeals) that the assessee has not discharged the onus cast upon him and accordingly the action of the Ld. CIT (Appeals) is upheld treating the impugned income as income from other sources.
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2017 (4) TMI 1550
Exemption u/s 54F - flats received in pursuance of development agreement - HELD THAT:- Respectfully following the decision of coordinate bench, in the case of ITO Vs. Ravuri Kishore & Others in [2017 (4) TMI 120 - ITAT VISAKHAPATNAM] we are of the view that the assessee is eligible for exemption u/s 54F of the Act, in respect of 3 flats received in pursuance of development agreement. CIT(A) after considering relevant facts has rightly held that the assessee is eligible for exemption u/s 54F of the Act for 3 flats - CIT(A) further observed that, since, the legal heirs has sold two flats within 3 years from the date of acquisition, the amount of capital gain exempted in respect of two flats u/s 54F of the Act shall be brought to tax in the A.Y. 2009-10. We do not find any error in the order of the CIT(A). Hence, we inclined to upheld the CIT(A) order and dismiss ground raised by the revenue.
Computation of long term capital gain in pursuance of development agreement and adoption of consideration for transfer of property - A.O. has adopted guidance value of the land to determine the consideration received towards transfer of property in pursuance of development agreement - assessee contended that cost of constructed apartments has to be considered for determination of consideration by transfer of property but not the guidance value of the land - HELD THAT:- We find that once the issue has been decided that the assessee is eligible for exemption u/s 54F of the Act and in respect of all the flats, the other issues raised by the assessee with regard to the computation of capital gain and determination of consideration for the purpose of computation of capital gain becomes academic, as the assessee is eligible for exemption towards all the flats received in pursuance of a joint development agreement and this does not matter whatever is the value of flat or land to determine the consideration received for transfer of land. Therefore, we are of the view that determination of sale consideration and computation of capital gain has no impact on the total income, once exemption is allowed towards all flats received in pursuance of development agreement.
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2017 (4) TMI 1549
Addition u/s 68 - Addition based on duplicate sets of accounts found during the Survey - deletion of addition by ld. CIT(A) - HELD THAT:- The statement of one of the partner Mr. Gaurav R. Viradia was taken on 06.10.2007 who reached from Baroda on second day of survey. Genesis of the impugned addition was the duplicate set of books of accounts extracted from the residence of Mr. Kalpesh Vaghani but printed at the office of assessee on 09.10.2007. Mr. Kalpesh Vaghani came into picture during the course of survey when it was informed to the survey team that books of accounts are in the computer of Mr. Kalpesh Vaghani who has been appointed for preparing projected financial statements for the purposes of taking bank credit limits. The facts about the role of Mr. Kalpesh Vaghani also get affirmed by his affidavit which has not been challenged by the Revenue authorities, wherein it has been categorically stated that major modification were made in the actual books of accounts and various figures were inflated to show a bright financial future of the assessee firm and to make them fit as per the requirements of banking authority so that higher working capital limit is granted for the projects undertaken.
Disclosure statement made by the partner Mr. Gaurav R. Viradia was retracted on 30th October, 2007 wherein he stated that contents appearing in the statements recorded on 06.10.2007 were never stated by him because it was practically not possible for him to work out such complex financial details in a small period of two to three hours that too after travelling by road from Baroda to Bhavnagar. Assessee firm’s partner Mr. Gaurav R. Viradia further denied in his retraction letter about the acceptance and payment of cash in the alleged duplicate set of books of accounts.
No attempt was made either in the course of survey or subsequent to survey i.e. up to the date of framing the assessment to call and record the statement of Mr. Kalpesh Vaghani to extract the truth. Also no enquiry was conducted against the partners for the alleged additions in the assessee firm in the given facts when it was an initial year of commencement of business and there was no previous source of capital or accumulated funds of the assessee firm which could be treated as an unaccounted or undisclosed income.
In the case of assessee also the statements taken u/s.133A of the partner Mr. Gaurav R. Viradia were later on retracted and the only evidence Revenue is harping upon is the duplicate set of books of accounts on which most of the entries, as admitted by the Accountant and the Consultant have been manipulated / enhanced / modified / re-arranged in order to prepare projected financial data to be provided to banks for getting sanctioned higher working capital credit limits for running the projects undertaken by the assessee firm. In view of totality of facts and discussion made above, we find no reason to interfere with the order of ld. CIT(A) who has deleted the impugned addition u/s.68. - Decided in favour of assessee.
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2017 (4) TMI 1548
Deduction claimed u/s. 80P(2)(a)(i) - interest earned from FDRs, with banks - HELD THAT:- The questions of law raised in these appeals, especially in relation to Cooperative Credit Societies, which earned interest on fixed deposits kept with other banks, has already been decided by us in a batch of writ petitions [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] Therefore, following the same, the questions of law are answered in favour of the respondent-assessee and the appeal is dismissed.
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2017 (4) TMI 1547
Registration of sale certificate - attachment order for same property passed by Sub Ordinate Judges Court - whether the sale certificate produced by the petitioners is liable to be registered by the first respondent, in view of the attachment order passed by the Sub Ordinate Judges Court, Ernakulam? - HELD THAT:- The facts and circumstances of the case reveal that the mortgage was executed by depositing the title deed of the property in question in the year, 2005. The property was purchased by the first petitioner in the auction proceedings in accordance with law on 10.10.2014. However, the attachment in question was secured in the suit proceedings in a suit filed in the year, 2016. Therefore, it is unequivocally clear that a charge was created over the property much prior to securing the attachment of the property in the year, 2016. The sale proceedings also took place prior to the attachment ordered by the court.
It is convincingly clear that, there is no order passed by the Sub Registrar enabling the petitioners to prefer an appeal under Section 72. Moreover it is well settled and apposite that merely because there is a statutory remedy available under law, the right conferred on the petitioner under Article 226 of the Constitution of India cannot be taken away, if and when there are sufficient grounds for the petitioner to resort to the said constitutional provision. When a law is laid down by this Court in respect of the issue of registration of documents on the basis of SARFAESI proceedings, Government functionary is duty bound to follow the same. When such a course is not adopted, the action of the statutory authority becomes illegal and arbitrary - petitioners are entitled to invoke the jurisdiction conferred on this Court under Article 226 of the Constitution of India.
The petitioners are entitled to succeed in this writ petition - petition allowed.
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2017 (4) TMI 1546
Exemption from Excise Duty - fly ash bricks - case of appellant is that no prescribed form was made available by the jurisdictional Commissioner - HELD THAT:- The appellant was using more than 40% of fly ash in manufacture of bricks and entire record was maintained in ER-4 which was also produced before the lower authorities - For fulfilling the Condition No. 36, N/N. 06/2002-CE dated 01.03.2002, the jurisdictional Commissioner has not made any form published in form or manner where information was required. When it is so, the information supplied by the appellant in ER-4 was sufficient pertaining to fly ash brick which is exempted from the duty.
Appeal allowed - decided in favor of appellant.
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2017 (4) TMI 1545
Deduction u/s. 80P - interest bearing funds for normal business activity of advancing credit to members - CIT(A) concluding that there is no nexus between the interest/dividend income earned from the co-op, societies and the interest expenditure incurred by the assesses on borrowed funds on the ground that there is no proof of the investment of such interest bearing funds to earn the said income without appreciating the fact that the assessee has failed to substantiate the above in full measure with proper evidences - HELD THAT:- We have noticed that the assessee has been statutorily investing its surplus fund from the year 1992 with other Cooperative Societies which include Co-operative Banks and on such investments, the appellant has been receiving interest and dividend which has been claimed as deduction u/s. 80P(2)(d) of the Act.
Provision of section 80P(4) are not applicable to the assessee, because section 80P(4) says that provision of this section shall not apply in relation to Co-op Bank other than Primary Agricultural Credit societies or a Primary Co-op agricultural and Rural Development Bank. Regarding eligibility for receiving interest received from the co-operative bank we have noticed from the judicial pronouncement in the case of Surat Vankar Sahakari Sangh Ltd. v. Assistant Commissioner of Income Tax [2016 (7) TMI 1217 - GUJARAT HIGH COURT].
As noticed from the finding of the Ld.CIT(A) that the assessee has claimed the gross amount u/s. 80P(2)(d) which includes interest income and dividend income received from other Co-operative societies. However, in the computation of income, assessee has restricted the deduction which was net income. CIT(A) is justified in his decision that the net income in the case of assessee allowable as deduction u/s. 80P(2)(d). In view of the above stated facts and detailed findings of the Ld.CIT(A) given in his order, we disinclined to interfere in the decision of Ld. CIT(A) - Decided against revenue.
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2017 (4) TMI 1544
Deduction u/s 80IB - As per AO assessee had deviated from sanctioned plan by constructing three duplex flats exceeding the area of 1500 sq.ft. in 9th floor by combining flats in 9th and 10th floors thereby violating the provisions of clause (c) of section 80-IB(10) and assessee had sold more than one flat to two/three persons in the name of their spouse or family members thereof - assessee had paid fine for violation of the sanctioned plan at the time of obtaining occupancy certificate on 31/3/2011 - HELD THAT:- As regards violation of clause (f) of sub-section (10) of section 80-IB, the submission of the appellant, that the agreements for sale were entered before insertion of clause (f) and therefore, have no substance, for the simple reason that in respect of M.Vani M Rao, the date of agreement is 15th April 2013 which is clearly after insertion of clause (f).
Clause (f) was inserted into the Act by the Finance (No.2) Act, 2009 w.e.f 1/4/2010. Since the Finance (No.2) Act, 2009 became law w.e.f. 19/08/2009, restrictions regarding allotment of residential units shall not apply in respect of allotments made before 20/08/2009 Whereas in this case, allotments were made subsequent to insertion of clause (f) in the Act. The submission of the assessee that in other cases, memorandum of sale agreements were entered into on 29/06/2007, have no substance for simple reason that sale agreements were not registered and no consideration was stated to have been paid on the date of agreement and there is nothing to show that possession of the flats was handed over to the purchasers nor any right in favour of the buyer was created by virtue of entering into such sale agreement.
The object behind the tax benefit for housing project is to build housing to low middle income groups. This has been ensured by limiting size of residential units to 1000 sq.ft. or 1500 sq.ft. as the case may be. However, rule is circumvented by some developers by entering into agreements to sell multiple adjacent units to single buyers. To curb this practice clause (f) has been inserted to sub-section (10) of section 80-IB. Thus restriction imposed on allotment of flats is only intended to safeguard the objects of the beneficial provision. Any ingenious method adopted to circumvent this provision cannot be permitted.
Therefore, we hold that the assessee is not entitled to deduction u/s 80-IB as he has clearly violated the provisions of clause(f) to sub-section (10) of section 80-IB - Decided against assessee.
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2017 (4) TMI 1543
Validity of proceedings under Section 11A of the Central Excise Act, 1944 - HELD THAT:- In view of the fact that the question pertains to the application of an exemption Notification under the Central Excise Act and the respondent is admittedly not guilty of suppression of any material fact, invocation of Section 11A of the Central Excise Act, 1944 is not justified.
The appeal is required to be rejected threshold - Appeal dismissed.
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2017 (4) TMI 1542
Addition u/s 69C - no evidence the payment has been made and that too in the said financial year relevant to Assessment year in the appeal - HELD THAT:- As perused the statements given by Sh. K.K.Goel during search proceeding and also of Shri. A.K. Aggarwal and Shri. P.K. Jain during the assessment proceedings. Nowhere in the statements the matter of amount being received in cash has been established by the Revenue. In all the three statements, it was categorically said that there were request for hike in salary. Under these circumstances there is no need for a cross examination by the assessee also where as the Ld. CIT(A) has observed that cross examination was declined by the assessee. Nowhere the Revenue could prove or establish that this amount represents the cash paid or any evidence that the amount have been received by the recipients. The Ld. CIT was also not sure where the amount have been paid or payable. The Revenue has to prove that these documents represents unaccounted payments by either direct evidence or corroborative evidence which was not so in this case. Hence the addition is hereby deleted.
Disallowance under section 14A - DR argued that the investment for earning exempt income were made from mixed funds hence disallowance under section 14A has been made as per Rule 8D - HELD THAT:- On perusal of the records it was found that no statement has been obtained by the AO to prove whether the amount are mixed funds or not and also keeping in view the fact that Ld. CIT has deleted the addition in the earlier year and no new investment has been made, hence, no disallowance is warranted for the Assessment year 2010.11.
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2017 (4) TMI 1541
Computation of deduction u/s 10B - HELD THAT:- This issue is covered by the decision of coordinate bench of the tribunal in the assessee’s own case [2011 (7) TMI 1259 - ITAT BANGALORE] for the assessment year 2002-03, 2003-04 and 2004-05, wherein it was held that if freight expenses are not included in export turnover and total turnover, then they cannot be reduced while computing the deduction u/s 10B of the Act. In our view this issue is no more res integra and it is covered by the decision of Hon’ble Jurisdictional High Court [2011 (8) TMI 782 - KARNATAKA HIGH COURT] in 349 ITR 98. Therefore, the grounds raised are required to be allowed.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The Bombay High in the case of Godrej and Boyce Mfg. Co. Ltd., Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D is prospective in nature and is not retrospective in nature and is only applicable from asst. year 2008-09 onwards. Therefore, in our view, Rule 8D cannot be invoked by the AO for calculating disallowance u/s 14A. Thus we set aside this issue to the file of the AO for computing reasonable expenditure incurred in relation to income which does not form part of the total income.
TP adjustment - Comparable selection - HELD THAT:- Exclusion of Mold-Tek and Eclerx Services as they are into KPO services and the assessee is providing specialized services and is not simply into BPO services provider as projected by the assessee. The work scope and the agreement of the assessee with its AE clearly provides that the assessee is providing high end technical services to its AE and for that purposes has engaged various technical staffs.
Vishal Information Technologies Ltd. And Infosys BPO was into outsourcing, therefore, it cannot be comparable with that of the assessee. Moreover, the business model of the comparable company viz., Vishal Information Technologies Ltd. is different from the assessee as it is getting its work done through outsourcing. Similarly, Tribunal has excluded the Infosys BPO Ltd. from the list of comparables after examining the comparability and size of the Infosys BPO in the judgment refereed herein above.
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2017 (4) TMI 1540
Entitlement to pension or not - service was pensionable in view of Government Order dated 05.05.2000 or not - HELD THAT:- Fundamental Rule 56 in State of Uttar Pradesh is not a piece of subordinate legislation under proviso to Article 309 of the Constitution but it is a provincial principal legislation enacted by Uttar Pradesh Fundamental Rule 56 (Amendment and Validation) Act, 1976 (U.P. Act No. 33 of 1976). It clearly declares that a person who retired under Fundamental Rule 56 shall be entitled for "retiring pension" and other benefits shall be such as applicable in accordance with law.
Qualifying service is prescribed under CSR read with Rules, 1961 and therein if a person has continued to work for 10 years and more he is entitled for pension. In the present case it was not open to respondents to declare through an executive order that service rendered by petitioner is not pensionable when statute itself declare that retiring pension shall be paid to petitioner or any other person who retire under Fundamental Rule 56 read with Section 10(1)(b) of Act, 1948.
Petition allowed - decided in favor of petitioner.
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2017 (4) TMI 1539
Classification of par boiling machinery - classifiable under chapter heading 84.37 of Central Excise Tariff or under chapter heading 84.19? - it was held by High Court that the par-boiling machine falling under heading 84.19.
HELD THAT:- The appeal is admitted.
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2017 (4) TMI 1538
Additions on account of notional interest relating to alleged delayed payment of receivables from AEs - HELD THAT:- As relying on own case [2016 (4) TMI 202 - ITAT BANGALORE]we deem it appropriate to remand this issue back to the file of the Assessing Officer j TPO for examination as to whether there was any agreement for charging interest on late payments or not and if it is found that there was no such agreement, then the T.P. Adjustment made in this regard requires to be deleted. To the extent, the corresponding grounds are treated as allowed.
Expenses on account of Electronic Data Processing (EDP) - holding the same as capital expenditure but granting depreciation on it @60% - HELD THAT:- Since this Tribunal has upheld this addition in the earlier years, supra, and since there is no factual change, this issue fails and the corresponding grounds are dismissed.
Disallowance of club expenses - HELD THAT:- It is seen from the assessment order that the AO has not examined the nature of these expenditures. The assessee also pleaded that it was not given adequate opportunity in this regard. In the facts and circumstances, we deem it fit to remit this issue to the AO who shall re-examine this issue and after affording due opportunity to the assessee shall pass a speaking order.
Short credit of taxes deducted at source - HELD THAT:- We remit this issue back to the file of the Assessing Officer to examine and rework the short credit of taxes deducted at source.
Levy of interest u/ss. 234B, C & D - HELD THAT:- As charging of interest is mandatory and there is no discretion in the matter as held by the Hon'ble Apex Court in the case of Anjum M.H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT]. We therefore uphold the action of the AO in charging of the interest u/ss. 234B, C & D. The AO is directed to recomputed the interest u/ss, 234B, C & D after giving effect to this order.
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