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Showing 101 to 120 of 1271 Records
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2015 (6) TMI 1180
Additions u/s 40A(9) - Tribunal had restored the issue to the file of A.O. in earlier years, therefore, by respectfully following the same we also restore the matter back to the file of A.O. to decide the same afresh - HELD THAT:- Since the Tribunal did not delete any addition, the question does not appear to have been formulated on the basis of the impugned judgment and therefore, need not be decided.
Disallowance under the head proportionate management expenses u/s 14A - AO decided initially by the assessing officer on the basis of a thumb rule - HELD THAT:- Thumb rule applied by the assessing officer was rectified by another thumb rule by the Tribunal. If there is no basis to support the thumb rule applied by the AO or if there is any basis to support the thumb rule applied by the AO then the same rule shall apply to the thumb rule applied by the Tribunal.
Mr. Chowdhury, learned advocate appearing on behalf of the appellant/revenue, was unable to show as to how the sum of ₹ 40 lack and odd disallowed by the assessing officer is in accordance with law.
When the sum of ₹ 40 lacs and odd was on the basis of a pure guesswork and the learned Tribunal has reduced to a sum of ₹ 20 lacs, it cannot be said that the discretion was exercised unreasonably or illogically. Therefore, the second question is answered in the negative.
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2015 (6) TMI 1179
Addition of bad debts u/s 36(1)(vii) - proof of debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income - HELD THAT:- We are not in agreement with the findings of the CIT( Appeals) in allowing the claim of the assessee as bad debt. CIT(Appeals) wrongly observed that the assessee is complied with the conditions as stipulated in sec.36(1)(vii) read with sec.36(2) - legal requirement is that the amount of bad debt must have gone into the computation of the assessee’s income.
Thus, in the case of a trader, if the sales have been made on credit and corresponding debt becomes irrecoverable, the said debt can be allowed as bad debt, as sales have gone into the computation of the assessee’s income. In the instant case, there is no material to suggest that the debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income and the assessee has not established beyond any doubt that the debt was incurred in normal course of business carried on by the assessee and the method followed by the assessee in writing off debt is not correct. - Decided in favour of revenue
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2015 (6) TMI 1178
Validity of assessment order - TNVAT Act, 2006 - failure to file Form-WW - Held that:- The petitioner admits the fact that on receipt of the notice issued by the respondent, the petitioner failed to file reply within the stipulated time. Therefore, the respondent was left with no other option except to pass the final orders. Accordingly, he has proceeded to pass final orders. Consequently, as per Section 63A(2) of the Act, he has only proposed to levy a fine of ₹ 10,000/- - But the orders say that he has proposed to levy interest of ₹ 10,000/-.
As there is a typographical error, this Court, while rectifying the error, made it clear that the petitioner has to pay penalty of ₹ 10,000/- under Section 63(A)(2) of the Act.
There are no merits in the petition - petition dismissed.
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2015 (6) TMI 1177
Rejection of books of accounts - Net profit estimation at 5% of the total turnover - Held that:- FAA had mentioned that the assessee had produced certain details including bank statements before AO,during the assessment proceedings, that the AO had passed an ex-parte order. If the assessee’s books of account were audited and an audit report was filed along with the return of income,then it cannot be said the assessee was not maintaining the books of account. Considering the peculiar facts and circumstances of the case,we have admitted the additional evidence produced before us by the assessee. 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. The effective ground of appeal filed by the assessee is allowed in favour of the assessee in part.
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2015 (6) TMI 1176
Disallowance of rebate u/s 80IC as per Rule 8D read with section 14A - Held that:- It is relevant to observe that in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D is applicable from assessment year 2008-09. It has no application prior to assessment year 2008-09. In the instant case, the assessment year is 2007 08. It is pertinent to state here that following the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. (supra) different Benches have set aside the matters back to the Assessing Officer where the additions were made on the basis of Rule 8D. In view it Rule 8D is not applicable to the assessment year under consideration and, therefore, set aside the orders of the lower authorities on this issue and remand the matter to the file of the Assessing Officer to decide the issue afresh
Disallowance of rebate u/s 80IC on account of Exchange Rate Fluctuations - Held that:- The issue in hand is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Rachna Udyog [2010 (1) TMI 38 - BOMBAY HIGH COURT] has categorically held that the exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking and, therefore, difference on account of exchange rate fluctuation is entitled to deduction under section 80IB of the Act. No contrary decision was brought to my notice. Respectfully following above thus hold that the difference on account of exchange rate fluctuation is entitled to deduction under section 80IC of the Act. This ground of appeal is allowed.
Disallowance on account of interest expense under section 36(1)(iii) - Held that:- As assessee submitted that the provisions of section 36(1)(iii) of the Act are applicable in this case. However, she stated that the disallowance of interest @ 12% is not correct and the same should be worked out on pro-rata basis. Fully agree with the above submissions of the learned A.R. for the assessee and direct the Assessing Officer to re-work the disallowance on pro-rata basis. This ground of appeal is disposed off accordingly.
Disallowing deductions u/s 80IC for the additions made due to certain disallowances - Held that:- Direct the AO to re-compute the deduction allowable under section 80IC of the Act keeping in view the above observations and in accordance with law after affording reasonable opportunity of being heard to the assessee.
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2015 (6) TMI 1175
Reopening of assessment - scope of the expression ‘reason’ in the phrase ‘reason to believe’ - addition on gift receipt - Held that:- AO received an information from ACIT, CC-V, Ludhiana that assessee has received gift of ₹ 5 lakhs from Shri Jagdish Duggal, 38G, Sarabha Nagar, Ludhiana from bank account No. 16503 of Shri Jagdish Duggal maintained with Canara Bank, Bharat Nagar Chowk, Ludhiana. AO has also this information that the nature of this entry was an accommodation entry. The above information / material received by the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee’s hands. Therefore, there is no merit in the submissions made on behalf of the assessee that reopening of the assessment was invalid.
Material before the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee’s hands. Thus reopening of the assessment was valid - Decided against assessee
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2015 (6) TMI 1174
Income accrued in India - Characterization of income - consideration paid by assessee to the non resident company for acquiring right to distribute TV channels - Royalty OR business income - income subject to withholding tax - Held that:- As decided in assessee's own case when the payment received by the recipient Company is not royalty, the same would also not be royalty in the hands of payee. Thus, no substantial questions of law arises for our consideration. See SET SATELLITE (SINGAPORE) PTE LTD. VERSUS DEPUTY DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION AND ANOTHER [2008 (8) TMI 96 - BOMBAY HIGH COURT]
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2015 (6) TMI 1173
Offence under PMLA - personal savings bank account of the petitioner maintained with the ICICI Bank freezed/attached - Whether the respondent no.2 was justified in invoking Section 102 of the Code for the purpose of freezing the savings account of the petitioner maintained with the ICICI Bank? - Held that:- The instructions were issued to the bank to freeze the account of the petitioner way back in the month of August 2014. Indisputably, till this date, the authority has not been able to pass any order of provisional attachment under Section 5 of the Act.
This would suggest two things : (i) there is no sufficient material collected by the authority so that the authority can record its reasons to believe that if the account is not freezed, then the non freezing of the property would frustrate the proceeding under the PMLA, and (ii) the authority does not intend to file any complaint against such person whose account has been ordered to be freezed.
For the aforesaid reasons, although the judgment was reserved CAV, this matter was once again notified on 8th June 2015 only with a view to ascertain from the learned Assistant Solicitor General of India, whether in the mean time the authority had passed any order of provisional attachment under Section 5 of the Act or whether it intended to pass such order in the near future if adequate material has been collected during the course of the investigation carried out so far. Assistant Solicitor General of India, after taking instructions from the officer of the Department present in the Court, made a statement that the authority has been able to collect sufficient material on the basis of which the authority now intends to pass an appropriate order of provisional attachment under Section 5 of the PMLA.
On one hand if an order of provisional attachment is passed under Section 5 of the PMLA, the life of it is 150 days subject to the further orders that may be passed by the adjudicating authority, whereas if an order of attachment is passed under Section 102 of the Code read with Section 65 of the PMLA, then there is no time period prescribed so far as its operation is concerned. Such a situation should not crop up.
In light of the statement made by the learned Assistant Solicitor General of India, do not want to go further into the matter - if the provisional order of attachment under Section 5 of the PMLA is not passed within a period of one week from today, then the instructions given by the Department to the bank for freezing of the account shall automatically come to an end and the bank shall permit the petitioner thereafter to operate her account.
The order of attachment of a bank account in exercise of the powers under Section 102 of the Code read with Section 65 of the PMLA cannot continue for an indefinite period of time, more particularly, when the life of an order of the provisional attachment under Section 5 of the PMLA is maximum upto 150 days.
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2015 (6) TMI 1172
Penalty u/s 271(1)(c) - disallowance u/s. 43B - VRS payment claimed excessively came to their notice during the course of scrutiny - Held that:- As rightly pointed out by CIT(A), with regard to the VRS claim as soon as it had come to the notice of the assessee the same was accepted. In fact it was the assessee, who brought the same to the notice of the Assessing Officer. Similarly copy of printed annual report of 2003-04 shows consolidated prior period figures for all the units and having regard to the circumstances of the case learned CIT(A) observed that it was not in the nature of furnishing inaccurate particulars, even though the claim was not allowable.
CIT(A) also observed that disallowance u/s. 43B is merely a technical disallowance and it cannot be inferred that it amounts to furnishing of inaccurate particulars or concealment of income. In our opinion the order passed by CIT(A) is based on cogent material and hence deserves to be accepted. Since explanation given by the assessee is substantiated by furnishing relevant particulars. It is for the Revenue to prove that the explanation furnished by the assessee is false. Whereas in the instant case no such material was furnished by the Revenue - Decided against revenue.
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2015 (6) TMI 1171
Remittance of an amount of ₹ 3,50,000/-, out of which, ₹ 50,000/- was directed to be credited in the housing loan for regularising that loan account - Held that:- Since a counter affidavit has already been filed by the appellants in the writ petition, which is pending before this Court, we are of the view that the matter need to be considered by the learned Single Judge. It is open for the bank to seek clarification/modification/vacation of the interim order, if so advised - appeal not entertained and is dismissed.
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2015 (6) TMI 1170
Rebate claim - rejection on the ground that in the FIRCs, name of the company was mentioned as ‘Affiliated Computer Services of’ whereas the name of the exporter was Affiliated Computer Services of India Pvt. Ltd. - Held that:- Apparently the lower authorities felt that there could be another unit by name ‘Affiliated Computer Services’ and another company by name ‘Affiliated Computer Services of India Pvt. Ltd’. - During the hearing, my attention was also drawn to the certificate wherein the name of the company is shown as ‘Affiliated Computer Services of’. Obviously this has happened because the number of characters provided for the first line ended at this level.
In view of the fact that the appellants have produced the certificates from the bank and Chartered Accountant and further rebate claims, in any case, to be sanctioned by the original authority - the matter can be remanded to the original authority to verify the documents and sanction the rebate claims - appeal allowed by way of remand.
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2015 (6) TMI 1169
Addition of Prior Period Expenses - addition for want of proof and necessary evidence - Held that:- CIT(A) has duly associated the assessing authority with assessee’s additional submissions. It submitted its report on 5.8.2011. The lower appellate order relies upon the assessee’s Board’s resolution dtd. 15.9.2003 to prove the direct payments in question. The assessee’s payments made in the earlier assessment years have nowhere been doubted. The assessee has been able to prove both payment of liability as well as its crystallization. The Revenue fails to point out any irregularity or infirmity in the findings under challenge during the course of hearing. Nor has it placed on record any evidence disputing payment made in preceding assessment years. - Decided against revenue.
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2015 (6) TMI 1168
Disallowance u/s 14A - no exempt income was earned - Held that:- It is observed from the submissions made by the assessee before the AO that no exempt income was earned during the year. This contention raised by the assessee has not been rebutted by the AO. Despite that, the AO proceeded to compute disallowance u/s 14A read with Rule 8D. In the absence of any exempt income, there can be no disallowance u/s 14A. Hon’ble jurisdictional High Court in CIT vs. Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT) has held that no disallowance u/s 14A can be made in the absence of any exempt income - Decided in favour of assessee
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2015 (6) TMI 1167
Penalty levied u/S 271(1)(b) - non-compliance of the notices issued by the AO - Held that:- AO issued show cause notice on 1.5.2012 for its compliance or appearance on 7.5.2012. The assessee again did not appear on the date fixed i.e. 7.5.2012 instead he again sent a letter by speed post on 5.5.2012. There is no evidence on record that the letters sent by the assessee was received by the Assessing Officer before the date of hearing.
The conduct of the assessee shows that he is totally non-cooperative to the Assessing Officer and he has no respect for the authorities. Since the assessee never appeared before the Assessing Officer in response to the notices issued by AO either in the assessment proceedings or in the penalty proceedings, we are of the view that no lenient view can be taken on the assessee, as if the penalty is deleted, a message will go to the public at large that there is no need to make compliance of the notices of the Income-tax authorities. The order of the CIT(A), who has rightly confirmed the penalty, deserves to be confirmed and accordingly we confirm the same. - Decided against assessee.
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2015 (6) TMI 1166
Entitlement of the Applicant to recover any sum against the company in liquidation on the basis of a decree obtained against the guarantors of the company - Held that:- The decree is merely against the guarantors of the company in liquidation and does not give rise to any decretal debt, against the company in liquidation. Secondly, and even otherwise, insofar as the proofs of debt under Rule 163 of the Company (Court) Rules, 1959 are concerned, the Official Liquidator has to act strictly in accordance with the provisions of the Companies Act and the Rules, for adjudication of debts. Under these provisions, interest is payable to creditors only if the company is left with a surplus fund after disbursement of the debts of the secured creditors and workers on pari passu basis under the provisions of Section 529 and 529A of the Act and also after distribution of preferential dues under Section 530 of the Act. Until the distribution of dues thus has been accomplished and it is ascertained that there are surplus funds after such distribution, there is no question of awarding any interest on the dues of any creditor. There is no case here of any such surplus funds as of date. The original adjudication by the Official Liquidator of the proof of debt submitted on 24 April 2008 by the Applicant, thus, need not be disturbed.
As far as the other prayer, namely, the claim made in prayer clause (b) of the Application for safeguarding of the assets, is concerned, the Applicant will have to lodge its proof of debt for this claim with the Official Liquidator and the Latter will have to adjudicate the same and make a report, accordingly to this Court.
After adjudicating the claim, the Official Liquidator shall submit its final report concerning the adjudication of the claims received by it, so far, to enable this Court to ascertain the distribution of dues in accordance with the provisions of Law;
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2015 (6) TMI 1165
Reopening of assessment - reasons to believe - Held that:- Petitioner is correct in his submission that the communication dated 06.01.2015, Annexure-K, is bereft of reasons and is not a speaking order. “The giving of reasons in support of the conclusions by judicial and quasi judicial authorities when exercising initial jurisdiction is essential for various reasons. First it is calculated to prevent unconscious, unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimize the chances of unconscious infiltration of actual bias or unfairness in conclusion.” This is the observation of the Apex Court in Woolcombers of India Ltd., vs. Woolcombers workers Union and another [1973 (8) TMI 158 - SUPREME COURT].
The communication, Annexure-K, simply states that the objections are rejected, since the licence fee/logo is a “expenditure towards good will”. This, in my considered opinion, is a ‘conclusion’ and not a ‘reason’. In the circumstances, there is a need to interfere with the communication, Annexure-K. - Decided in favour of assessee
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2015 (6) TMI 1164
Transfer pricing - determination of arm’s length price - selection of comparable - The average mean margin of the 20 comparable companies selected by the TPO was 23.65% whereas the average mean margin of the software development services segment of the assessee was computed by the TPO at 14.07% on total cost. After granting working capital adjustment at 0.11%, the TPO computed the T.P. Adjustment of ₹ 1,23,18,582 to the ALP of international transactions entered into by the assessee in the period relevant to Assessment Year 2008-09.
CIT(A) held that since the average margin of these four companies at 24.85% is higher than the average margin of comparables adopted by the TPO at 23.55%, he upheld the margin of 23.55% adopted by the TPO.
Held that:- AO directed to exclude Kals Information Systems Ltd. (Seg) from the final set of comparables as it is functionally different from the assessee in the case on hand, who is only a software service provider to its AEs.
Application of Related Party Transaction (‘RPT’) filter - Held that:- RPT filter should be considered at 15% of total revenues and companies having RPT in excess of 15% of total revenues are to be excluded from the list of comparables. In this view of the matter, the order of the learned CIT(A) holding that companies are not to be considered as comparables even if they have a single RPT i.e. that the RPT is in excess of 0% is hereby reversed.
Power of CIT(A) for enhancement of income - Held that:- Though the CIT (Appeals) has co-terminus power with that of Assessing Officer and can enhance the assessment, however, since he has not issued any show cause notice for enhancement under Section 251(2) of the Act, he cannot reject these two companies from the set of comparables. Therefore to the extent of the rejection of these two companies from the set of comparables, the order of CIT (Appeals) is set aside and the TPO is directed to recompute the ALP after giving effect to the order of the Tribunal in respect of the comparables which are directed to be excluded from the set of comparables.
Decided partly in favor of assessee.
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2015 (6) TMI 1163
Disallowance u/s 14A r.w.r 8D - assessee has rightly 84% expenses - CIT(A) has considered 100% expenses - Held that:- the calculation submitted by the assessee is reasonable and was required to be accepted by Ld. CIT(A). Therefore, considering the details of expenditure and calculation submitted by the assessee, we uphold the disallowance only to the extent of ₹ 14,25,020/- and rest of the disallowance upheld by Ld. CIT(A) is deleted and appeal filed by the assessee is partly allowed. - Decided partly in favor of assessee.
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2015 (6) TMI 1162
Refund of accumulated CENVAT Credit - Rule 5 of CENVAT Credit Rules 2004 - Revenue entertained a view that since the final product of the appellant is exempted, they are not entitled to the refund of the unutilized credit - Held that:- The issue is no more res integra and stands settled by the Hon’ble Bombay High Court’s decision in the case of Repro India Ltd Vs UOI [2007 (12) TMI 209 - BOMBAY HIGH COURT], where it was held that in such case where goods are exported, direction by revenue to the petitioner to pay 10% of sale price of exempted goods u/r 6(3)(b) is not justified - appeal allowed - decided in favor of appellant.
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2015 (6) TMI 1161
Amount Written off in its books of account - Held that:- It was a trading transaction and the assessee could not recover the amount since M/s Madras Polymounds refused to pay on the ground that they could not recover from their customer outside India, it has to be treated as a trading loss. Therefore, even if it could not be allowed as bad debt, it has to be allowed as trading loss while computing the taxable income. Therefore, this Tribunal is of the considered opinion that the lower authorities are not correct in disallowing the claim of the assessee. Accordingly, orders of the lower authorities are set aside and the addition made is deleted.
Disallowance u/s 14A - only objection of the ld. Counsel is that interest on loan alone could be considered for disallowance and the interest on overdraft facility which was availed for exporting the goods is for business purposes and therefore, cannot be considered for disallowance under Rule 8D - Held that:- The claim of the assessee with regard to interest on overdraft facility was not considered by either of the authorities below. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside and the issue of disallowance u/s 14A is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider this issue in the light of the material available on record and thereafter find out whether the interest paid by the assessee on overdraft facility has to be considered for disallowance under Rule 8D or not and thereafter decide the same in accordance with law after giving a reasonable opportunity of hearing to the assessee.
Allowability of club expenses - Held that:- This Tribunal is of the considered opinion that if the assessee establishes that the expenditure was incurred for the purpose of business, it has to be allowed. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside and the issue of club expenses is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the matter afresh
Deduction u/s 115JB - Assessing Officer disallowed the excess payment to the extent of ₹ 75,40,904/- from the net profit for the purpose of computation of book profit. The CIT(A) found that the assessee agreed for the disallowance by letter dated 28.12.2012 - Held that:- This Tribunal is of the considered opinion that when the assessee agreed for disallowance before the Assessing Officer, no further appeal can be entertained. Therefore, the disallowance made by the Assessing Officer with regard to excess claim of ₹ 75,40,905/- is confirmed.
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