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2020 (8) TMI 846 - ITAT BANGALORE
Rectification of mistake u/s 254 - deduction u/s 54 - assessee has pointed out that even after allowing deduction u/s. 54 of the Act, there would still be long term capital gain that would be chargeable to tax - Tribunal has proceeded on the basis that consequent to allowing deduction u/s. 54, there would be no long term capital gain that would remain for taxation - HELD THAT:- There is a mistake apparent on the face of record inasmuch as even after allowing deduction u/s 54 of the Act, there would still be long term capital gain that would be chargeable to tax and therefore the question of period from which indexation benefit should be allowed to the assessee ought to have been adjudicated. We accordingly recall the order of the Tribunal dated 30.12.2019 for the limited purpose of examining the question with reference to period for which the assessee should be allowed the benefit of indexation while computing the long term capital gain. The Registry is directed to post the appeal for hearing in due course with notice to the parties.
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2020 (8) TMI 845 - ITAT PUNE
Disallowance u/s. 35(2AB) - HELD THAT:- DR did not dispute the observation made by the Tribunal in assessee‟s own case for A.Y. 2010-11 [2019 (2) TMI 1918 - ITAT PUNE] . Therefore, in view of the above, we hold that the assessee is entitled to claim deduction @ 200% and therefore, we direct the AO to allow remaining @ 100%. Thus, the addition made to an extent is deleted. Thus, ground No. 1 raised by the assessee is allowed.
Disallowance u/s 14A as per Rule 8D (2)(iii) - HELD THAT:- The contention of ld. AR is that the assessee need not disallow any expenditure in earning exempt income under law. By inadvertent mistake the assessee made wrong disallowance in the original return of income as well as revised return of income and prayed to remand the matter to the file of Assessing Officer for its fresh consideration. The ld. DR reported no objection for its fresh verification. We find force in the submissions of ld. AR that the issue raised regarding disallowance of expenditure u/s. 14A is requires fresh verification. Taking into consideration the facts of the case and submissions of ld. AR and ld. DR, we remand the matter to the file of Assessing Officer for fresh verification. The assessee is liberty to file evidences, if any in support of its claim. Thus, ground No. 2 raised by the assessee is allowed for statistical purpose.
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2020 (8) TMI 844 - DELHI HIGH COURT
Continuation of Bail - Constitutional Validity of Sections 69 and 132 of the CGST Act, 2017 - HELD THAT:- It is directed that, till further orders, bail of the petitioner shall not be cancelled in the present case.
List on 18th November, 2020.
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2020 (8) TMI 843 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Violation of the provisions of PFUTP Regulations - trading dynamics as sufficient to establish PFUTP violations - how deceptive the nature of trading adopted by the Appellants are? - HELD THAT:- We are of the considered view that there are missing links in the investigation as brought out in the impugned order. While the trading pattern of both the Appellants; placing the buy orders for generally very small number of shares and the timing of the orders; all point towards possible violation of the provisions of PFUTP Regulations it is also possible that an investor through a thorough observation of the movement of the scrip could be placing orders in the system without any intention to manipulate the market.
Since the dividing line is very thin and blurred distinguishing both these categories is a difficult, if not impossible, task. Though the learned counsel shed some light on this ‘irrational behaviour’ some more analysis of the overall trading in the scrip during the investigation period would have been helpful since no connection have been established between the Appellants and the suspected/connected entities nor with the promoters or directors etc. of Mapro Industries.
The scrip of Mapro was not a miracle scrip, as reflecteded in its limited trading data given in the impugned order, for the Appellants to place their orders in the early morning itself, mostly just after 9 a.m. at prices higher than LTP by 2 to 4% as if this scrip had to be bought at any cost. If any investor takes such a stand, and if he/she is so convinced of the performance of the scrip, he/she would buy at least a reasonable quantity rather than placing a buy order for miniscule quantities of 1, 2, 5 or 10 shares etc as done by the appellants.
Nature and pattern of trading of the Appellants are violative of the stated provisions of PFTUP Regulations, 2003 but in the given facts and circumstances of the matter and in the absence of any effort in the impugned order towards connecting the dots in terms of relationship/connection/money transfer/even some interaction between the Appellants and other suspected entities or to the promoters of Mapro we are unable to uphold the penalty imposed on the two Appellants. A warning to the Appellants that repetition of trading of similar nature/pattern as the impugned ones will lead to penal consequences is sufficient to meet the ends of justice.
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2020 (8) TMI 842 - ITAT MUMBAI
Disallowance of the provisions for costs completed and contracts - HELD THAT:- As decided in own case for the A. Y. 2005-06 [2014 (9) TMI 313 - ITAT MUMBAI] assessee was following some system in estimating provisions. Therefore, without pointing out major defects it was not proper on part of the FAA to state that system was . FAA has given his finding without giving the reasons. In our opinion writing off of provisions in subsequent years cannot be basis for disallowing it. Accounting standards expect that assessee should write back such amounts in later years - No justification in confirming the disallowance without analysing the terms and conditions of the projects threadbare for which provisions were made during the year under apppeal.
Disallowance for cost overruns on incomplete contracts - HELD THAT:- As decided in own case for the A. Y. 2005-06 [2014 (9) TMI 313 - ITAT MUMBAI] FAA has given his finding without giving the reasons. In our opinion writing off of provisions in subsequent years cannot be basis for disallowing it. Accounting standards expect that assessee should write back such amounts in later years. FAA has overlooked the fact that out of the provisions made by the assessee, ₹ 3. 70 Crores were actually spent by the assessee in the subsequent years to complete the unfinished projects or to render further services. Therefore, in our opinion, he was not justified in confirming the disallowance.
Method of accounted under “Percentage of Completion Method” - HELD THAT:- CIT(A) while upholding the addition in question had not given any independent finding and had merely relied upon his order passed while disposing off the appeal of the assessee for the immediately preceding year i. e A. Y 2006-07[2019 (4) TMI 873 - ITAT MUMBAI]. We have perused the order passed by the Tribunal while disposing off the appeal of the assessee for A. Y 2006-07 wherein identical facts were involved, and finding ourselves to be in agreement with the view therein taken, respectfully follow the same. Resultantly, the order passed by the CIT(A) is set aside and the addition made by the A. O is vacated .
Disallowance of Excess of Progress Billings on completed contracts project - HELD THAT:- As the assessee has accumulated cost as well as revenue under these projects in the Balance Sheet by following completed contract method. The revenue has accepted such accumulation during AYs 2004-05 & 2005-06 and this is the third year of accumulation under the projects. It is not the case of the revenue that the income under these projects have not been offered to tax in subsequent years.
No case of revenue leakage has been established before us.Therefore, the action of revenue in disturbing the consistent method of accounting being followed by the assessee could not be held to be justified. Hence, we delete the impugned additions and allow these grounds of appeal.
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2020 (8) TMI 841 - SUPREME COURT
Condonation of delay of 45 days in filing application - interpretation of Section 173 of Motor Vehicles Act, 1988 - HELD THAT:- Chapter XII of the Act is a beneficial legislation intended at protecting the rights of victims affected in road accidents. Moreover, the Act is a selfcontained code in itself which provides procedures for filing claims, for passing of award and for preferring an appeal. Even, the limitations for preferring the remedies are contained in the code itself.
The interpretation of a beneficial legislation must be remedial and must be in furtherance with the purpose which the statute seeks to serve. The aforesaid view has been reiterated by this court on multiple occasions wherein this court has highlighted the importance acknowledging legislative intention while interpreting the provisions of the statute.
Section 173 provides that, any person aggrieved by the award passed by the Tribunal may approach the High Court within ninety days. However, the second proviso states that the High Court “may” still entertain such appeal even after the expiry of ninety days, if the appellant satisfies the Court that there exists sufficient reason behind the delay - Ordinarily, the word “may” is not a word of compulsion. [Justice G.P. Singh in Principles of Statutory Interpretation, 14th Edn.,page 519] It is an enabling word and it only confers capacity, power or authority and implies discretion.
Undoubtedly, the statute has granted the Courts with discretionary powers to condone the delay, however at the same time it also places an obligation upon the party to justify that he was prevented from abiding by the same due to the existence of “sufficient cause”. Although there exists no strait jacket formula for the Courts to condone delay, but the Courts must not only take into consideration the entire facts and circumstances of case but also the conduct of the parties. The concept of reasonableness dictates that, the Courts even while taking a liberal approach must weigh in the rights and obligations of both the parties. When a right has accrued in favour of one party due to gross negligence and lackadaisical attitude of the other, this Court shall refrain from exercising the aforesaid discretionary relief.
The delay of 45 days has been properly explained by the appellants, which was on account of illness of the wife of Appellant No.1. It was not appropriate on the part of the High Court to dismiss the appeal merely on the ground of delay of short duration, particularly in matters involving death in motor accident claims. Moreover, in the present case no mala fide can be imputable against the appellants for filing the appeal after the expiry of ninety days.
Matter remanded for fresh consideration on merits - petition allowed by way of remand.
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2020 (8) TMI 840 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Permission for withdrawal of appeal - application under Section 31 filed by the Resolution Professional for approval of the Resolution Plan is pending consideration before the learned Adjudicating Authority - HELD THAT:- The application under Section 31 filed by the Resolution Professional for approval of the Resolution Plan is pending consideration before the learned Adjudicating Authority. Since the decision is yet to be arrived at by the Adjudicating Authority with regard to the Resolution Plan approved by the Committee of Creditors, this appeal is premature.
The Appeal is accordingly dismissed as withdrawn - The Adjudicating Authority will provide an opportunity of hearing to the Appellant before taking a decision in regard to approval or otherwise of the Resolution Plan.
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2020 (8) TMI 839 - ALLAHABAD HIGH COURT
Levy of administrative charges - purchase of Molasses from various sugar factories situated in the State of Uttar Pradesh - HELD THAT:- As an interim protection, we provide that the respondents shall not demand any Administrative Charges, provided the petitioner continues to deposit GST as demanded both by the Central and the State Government under the said enactments - It is further provided that separate accounts for sale/supply/purchase of molasses shall be maintained both by the petitioner as also the State. The same shall abide by final outcome of this writ petition.
List immediately after four weeks.
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2020 (8) TMI 838 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of appeal - the appeal has turned infructuous in-asmuch- as the matter, in terms of impugned order, stood adjourned to 18th August, 2020 and that date is over - HELD THAT:- This appeal is accordingly disposed of with request to the President, National Company Law Tribunal, New Delhi to constitute a Bench comprising of a Judicial Member and a Technical Member for disposal of the matter in hand in conformity with and compliance with the direction passed by Hon’ble Apex Court in SONU CARGO MOVERS (I) PVT. LTD. & ANR. VERSUS UNION OF INDIA & ORS. [2019 (6) TMI 1579 - SUPREME COURT].
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2020 (8) TMI 837 - DELHI HIGH COURT
Release of freezed bank accounts of petitioner - Money Laundering - proceeds of crime - ‘reason to believe’ that the money lying in the credit of the said bank accounts are, in any manner, involved in ‘money laundering’ or are ‘proceeds of crime, or not - HELD THAT:- As an interim measure, on the petitioner(s) securing the amount as mentioned in paragraph 2.8 of the said application, copy whereof shall be supplied by the learned counsel for the respondent to the counsels appearing in the other petitions as well, by way of a Bank Guarantee/Fixed Deposit or by maintaining a deposit of an equivalent amount in their bank accounts in question, the operation of the Impugned action of the respondent of freezing their bank accounts shall remain stayed, till the next date of hearing.
List on 12th October, 2020.
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2020 (8) TMI 836 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH-II
Maintainability of application - initiation of CIRP - Differentiation of class of Financial Creditors - Allotment of commercial units - claims of the Applicants were admitted by the Respondent on the basis of the 'Addendum to MOU' - Respondent himself has been of the opinion that the MOU and Addendum to MOU having been executed just before the initiation of CIRP were of suspicious nature - whether the claim of the Applicants shall be admitted as 'independent Financial Creditor' or a 'Financial Creditor in a class'? - HELD THAT:- That from the contents of the Clause 3 of the MOU dated 10.06.2019, it is amply clear that the Allotment of the earlier allotted units shall stand cancelled with the issuance of Letter of Allotment individually for each Service Apartment in the Ninex Mall - However, in actual neither any allotment letter for Service Apartments were issued nor the earlier letters of allotment of the commercial units issued in 2015-16 were cancelled by the Corporate Debtor. The same has been confirmed by the Respondent in its Affidavit dated 21.08.2020.
That the plea taken by the Respondent, during the course of arguments, with respect to double allotment too does not merit consideration since the Respondent himself has submitted on affidavit dated 21.08.2020 that the Applicants were either the first allottees (in respect of seven units) or holding clear allotment (in respect of four units). None of these letters of allotment of the commercial units have been cancelled. Therefore, this Bench of the view that the earlier allotment letters issued in respect of 1 1 units by the Corporate Debtor in favour of applicants in the year 2015 and 2016 stand valid and cannot be treated as null and void.
This Bench is of the opinion that the claims of the Applicants being the allottees of commercial units will fall under the Category of 'Financial Creditor in a class' - application allowed.
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2020 (8) TMI 835 - ITAT BANGALORE
Assessment u/s 153A - grievance of the assessee that the assessment order passed by the AO in this year u/s 153A is bad in law because the assessment has not abated and no incriminating material was found - HELD THAT:- CIT (A) has noted several judicial pronouncements cited by the learned AR of the assessee before him and have given a categorical finding that the case of assessee squarely falls outside the purview of section 153A because the assessment has not abated and no new material was found or unearthed during the course of search and hence, these judgments are squarely applicable. These findings of CIT (A) are in favour of the assessee and the same have attained finality because no appeal is filed by the revenue against these findings of CIT (A).
Thus after holding this in para 6 that the case of assessee squarely falls outside the purview of section 153A, learned CIT (A) should have held that the assessment order passed by the AO u/s 153A is bad in law and he should have allowed the appeal of the assessee instead of holding that the appeal is partly allowed. Therefore, we hold that the assessment order passed by the AO u/s 153A is bad in law .
Estimation of income - undisclosed turnover - Addition made by the AO to the extent of 12% of the alleged undisclosed sales turnover based on data retrieved from the impounded materials, PC of the assessee’s business premises at Nagpur, SMS in the cell phones of the employees of at Nagpur - HELD THAT:- In the written submissions dated 11.06.2020 filed by the learned AR of the assessee for A. Y. 2015 – 16, this is one of the submissions that the coded words and figures found noted in impounded materials were disclosed in audited books of accounts and therefore, no addition is justified in this regard but no evidence was filed before us in support of this contention and therefore, this argument is rejected. This was an alternative oral argument that having noted that in the business of Arecanut, the books of accounts disclose profit @ 2 – 3%, learned CIT (A) was not justified in directing the AO to assess income @ 4% of undisclosed turnover as against 12 % rate adopted by the AO. It was the submission that it should be @ 2 % only. We find force in this alternative submission because the only basis adopted by CIT (A) to adopt higher percentage is this that in unaccounted business, taxes and levies etc. are evaded but the taxes i.e. VAT etc. are collected from the customer separately when the bill is issued and it is paid to government. In unaccounted sales, no bill is issued and therefore, no customer will pay taxes and levies which will result into higher profit to the seller. Therefore, we hold that adopting the profit rate of 2% will meet the ends of justice.
Addition of Cash Credit received by the assessee - the claim of the assessee about source of gift being sale proceeds received on sale of property and loan repaid by Abdul Gaffur - HELD THAT:- In the order of CIT (A) here is no basis indicated about this allegation of the AO that cash was deposited by the assessee in the bank account of Mrs. Haleema and there is no finding about this claim of the assessee also that the source of this gift of ₹ 50 Lacs is sale proceeds received on sale of property and loan repaid by Abdul Gaffur. Hence, the order of CIT (A) on this issue is not sustainable because there is no valid basis of adverse conclusion of AO and CIT (A) But the assessee also has not produced any evidence before us in support of this explanation that the source of this gift of ₹ 50 Lacs is sale proceeds received on sale of property and loan repaid by Abdul Gaffur.
Second gift claimed to have been received from sister Khadeejamma - AO has noted that initially the amount was transferred from har BUCB Account 3475 on 16.03.2015 to the assessee Mr. M A Siddiqque and it was routed through M A Siddique account only. Various account transfers are noted and adverse inference was drawn without any concrete adverse finding. There is no concrete adverse finding of CIT (A) either about this gift also and therefore, about this gift also, the order of CIT (A) on this issue is not sustainable because there is no valid basis of adverse conclusion of AO and CIT (A) But the assessee also has not produced any explanation or evidence about source of funds of ₹ 15 Lacs in the hands of the Donor sister Khadeejamma . Under these facts, we feel it proper to remand this matter to AO for a fresh decision by way of a speaking and reasoned order
Cash deposit in bank account is higher than declared turnover - Assessee's submission that books of accounts of the assessee are audited u/s 44AD and addition is made without rejecting the books of accounts which are audited and covered all the bank accounts - HELD THAT:- When there is no specific finding of the AO that a particular bank account is not appearing in the books of the assessee or that some specific entries of the declared bank accounts is not appearing in the books of the assessee, this cannot be said that that there is any unexplained deposit in bank merely for this reason alone that it exceeds the declared turnover. In this regard, these observations of CIT (A) clinches the issue in favour of the assessee that entire cash deposit of the year may not be the turnover of the particular year and he also observed very correctly that it may contain cash receipts from the credit sales of the earlier years, contra entries, loans and advances etc. Under these facts, we hold that there is no valid basis of this allegation of the AO that there is unaccounted cash income simply on this basis that deposits in bank accounts exceed the declared turnover. We delete this addition.
Addition of Mercedes Benz car found in course of search as parked in the parking place of the assessee is belonging to the assessee - HELD THAT:- We find that the main objection of the AO and CIT (A) is this that Mr. V. K. Abdul Gaffur is a man of small means and in view of this fact that the car was found parked in the premises of the assessee, this addition is justified but we find that the AO himself has noted the amount of income declared by Mr. V. K. Abdul Gaffur for A. Ys. 2010 – 11 to 2015 – 16 as per which, the agricultural income was declared and in addition to it, taxable income was also declared in the range of ₹ 1.68 Lacs in A. Y. 2011 – 12 to ₹ 2.71 Lacs in A. Y. 2015 – 16 and If total declared agricultural income and taxable income of these 6 years is aggregated, the same amounts to about ₹ 78.50 Lacs. In spite of this much income of Mr. V. K. Abdul Gaffur, the conclusion that he did not have ability to buy Mercedez Benz car is without any valid basis because a person having aggregate income of ₹ 78.50 Lacs in last six years can very much pay ₹ 35,36,740/- in the present year and parking of car in the premises of the assessee being brother in law is not unusual even if the car in question is used by the assessee. Hence, we delete this addition
Cash deposit by the assessee in bank account is in excess of the declared turnover not deposited by way of cheques - As alternatively argued even if source of cash deposit is not accepted as explained, it should be accepted that this is unaccounted turnover of the assessee - HELD THAT:- Only profit element @ 6.50% of undisclosed turnover of ₹ 103.68 Lacs should be added instead of addition of ₹ 103.68 Lacs being total cash deposit in bank. This ground is partly allowed.
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2020 (8) TMI 834 - ITAT BANGALORE
Rectification of mistake - TP Adjustment - comparable selection - AR submitted that there is a mistake apparent from the record in the order of Hon'ble Tribunal in respect of Ground of appeal No.3, where the assessee sought inclusion of 7 companies in the list of comparable for ITES segment - As submitted that the tribunal has fell into error in not considering the decision rendered by co-ordinate bench and the same constitute mistake apparent from record - HELD THAT:- We find merit in the submissions of ld. AR. Non-consideration of decision of co-ordinate bench cited before the tribunal is a mistake apparent from record in the case of Honda Siel Power Products Ltd. [2007 (11) TMI 8 - SUPREME COURT]. Accordingly, the Ground 3(l) in so far as it is related to I2T2 India Limited deserves to be recalled.
Ground of appeal No.4C pertains to erroneous computation of TP Adjustment of ITES segment by TPO taking into account both domestic and international transactions. The Ground of appeal No.4D pertains to foreign exchange gains arising from the provision of services in ITES segment, and was correctly remanded to the file of TPO. But the working capital adjustment referred in line 3 Para 10 above does not pertain to the above grounds and has to be excluded and whereas TP adjustment in non-AE transactions relates to ground of appeal no 4D and prayed for modification of Para in the order. We found the mistake pointed out by LdAr is a mistake apparent on record, accordingly we substitute the Para 10 of the order.
Ld. AO/Ld. TPO erred in law in erroneously not granting complete credit for advance tax and self-assessment tax paid by the Appellant, as claimed in the return of income
AO/Ld. TPO erred in law in erroneously not granting credit for Minimum Alternate Tax (MAT), as claimed in the return of income under section 115JAA of the Act. We found that there are no observations of the tribunal on these two grounds of appeal and there is a mistake apparent on record. Accordingly, we recall the impugned order of the Tribunal for limited purpose to adjudicate these grounds of appeal. Accordingly, Ground No.3(l), 8 & 9 are recalled
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2020 (8) TMI 833 - ITAT MUMBAI
TP Adjustment - corporate guarantee fall within the ambit of international transaction or not? - HELD THAT:- We find that the Hon’ble Jurisdictional High Court in number of occasions had restricted the Arm’s Length Price (ALP) from the guarantee fee to be at 0.5%. We find that these decisions were subsequently followed by the Co-ordinate benches of this Tribunal and one such decision which was quoted by the ld. AR at the time of hearing in the case of Virgo Engineers Ltd. [2019 (1) TMI 1841 - ITAT MUMBAI] wherein ALP of corporate guarantee fee was restricted to 0.5%. Respectfully following the same, we direct the ld. TPO to consider the ALP of corporate guarantee fee at 0.5% and further reduce 0.25% already charged by the assessee and make adjustment accordingly.
Expenses incurred towards providing additional services in respect of which service charges were collected by the assessee and separately offered to tax in addition to rent - HELD THAT:- It is not in dispute that assessee had duly offered rental income as well as amounts received towards amenities and service charges under the head ‘income from house property’. We find that the ld. AR referred to the decision rendered in group companies case of the assessee by this Tribunal in the case of Ewart Investments Ltd., [2019 (2) TMI 1647 - ITAT MUMBAI] wherein this issue was restored to the file of the ld. AO. The ld. AR fairly prayed for similar direction to be given in the impugned case. We have gone through the said decision and respectfully following the said decision, we deem it fit and appropriate to restore this issue to the file of the ld. AO and decide the issue before us on the same lines as directed.
Set off of interest charged and paid to the Income Tax department against interest granted by the Income Tax department on refunds in the same year - HELD THAT:- Issue decided in own case [2019 (11) TMI 411 - ITAT MUMBAI] issue is already covered positively in favour the assessee.
Disallowance u/s.14A - AO applied the computation mechanism provided in Rule 8D(2) of the Rules and made the disallowance - HELD THAT:- We hold that the business and commercial expediency of assessee making investments in these Tata group companies either with or without the use of borrowed funds have been proved beyond doubt in the instant case. The assessee company had earned both taxable income as well as tax free income out of these investments as detailed supra. Hence, there is absolutely no question of disallowance of interest u/s.36(1)(iii) of the Act. If the borrowed funds have been used for making investment for shares which inturn had yielded exempt income to the assessee, then, the allowability of interest need to be looked into from the angle of Section 14A of the Act r.w.r. 8D(2)(ii) of the Rules.
This fact has been correctly dealt, in our considered opinion, by the ld. CIT(A) in his order. We also find that this issue is also covered in favour of the assessee’s group company case by the order of this Tribunal in the case of Tata Industries Ltd. [2016 (7) TMI 1011 - ITAT MUMBAI] wherein this Tribunal by placing reliance on various decisions of the Hon’ble High Courts including the Hon’ble Jurisdictional High Court in the case of CIT vs. Phil Corporation Ltd, [2011 (6) TMI 187 - BOMBAY HIGH COURT] had decided the issue in favour of the assessee with regard to allowability of interest. Hence, we do not find any infirmity in the observation made by the ld. CIT(A) that the interest on borrowed funds used for making investments would be allowable u/s.36(1)(ii) of the Act subject to the provisions of Section 14A.
Disallowance made u/s.14A vis-à-vis computation of book profits u/s.115JB - HELD THAT:- We find that assessee had actually disallowed the sum of ₹ 474.19 Crores by identifying the actual expenditure under normal provisions of the Act. We find that the Special Bench of Delhi Tribunal in the case of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] had held that actual expenditure alone should be considered for disallowance in terms of Clause(f) to Explanation 1 to Section 115JB of the Act. Accordingly, we direct the ld. AO to disallow ₹ 474.19 Crores u/s.14A while computing book profits u/s.115JB.
Disallowance of payments made to Media Relations Agency - HELD THAT:- Applying the principle of consistency as has been held by the Hon’ble Supreme Court in the case of Radhasaomi Satsang [1991 (11) TMI 2 - SUPREME COURT]in allowing such claim to the assessee in earlier as well as in subsequent years, we hold that there is absolutely no case made out by the revenue for disallowing this sum of ₹ 12.66 Crores during the year under appeal.
Disallowance of pension payment to wholetime Directors - allowable business expenditure - HELD THAT:- We find there is absolutely no dispute that the wholetime Directors to whom pension of ₹ 89 lakhs was paid by the assessee company had rendered tremendous services to the assessee company which was duly recognised by the assessee company by way of Board resolution appreciating their services and sanction for payment of pension was accorded thereon. Hence, the business expediency of the subject mentioned transaction has been duly approved by the assessee and it cannot be said that it is not incurred for the purpose of the business of the assessee. We find that the case of the assessee squarely falls within the ambit of the decision of the Hon’ble Supreme Court in the case of Sassoon J. David & Co. Pvt. Ltd.[1979 (5) TMI 3 - SUPREME COURT]. Thus pension to wholetime Directors on the basis of Board resolution of the assessee company is incurred wholly and exclusively for the purpose of business of the assessee and is allowable as deduction.
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2020 (8) TMI 832 - ITAT BANGALORE
TP Adjustment - determination of Arm's Length Price [ALP] in respect of international transaction entered into by the assessee with its Associate Enterprise [AE] - comparable selection - HELD THAT:- The assessee provides software development [SWD] services to its AE. Rendering of SWD services by the assessee to its AE is an international transaction and that the income arising from the said international transaction has to be determined keeping in view the ALP as is required u/s. 92 of the Act. Thus companies functionally dissimilar with that of assessee need to be deselected.
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2020 (8) TMI 831 - SUPREME COURT
Applications seeking exemption from filing notarized affidavit and welfare stamp in both the matters are allowed.
Issue notice - No coercive steps shall be taken against the petitioners by way of arrest in the meanwhile.
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2020 (8) TMI 830 - MADRAS HIGH COURT
Possession of the warehouse - petitioner as well as R3 report that the warehouse is in the process of being cleared of the contents and Mr.A.P.Srinivas, learned Senior Standing Counsel seeks some more time to complete the process - HELD THAT:- R3 is already in possession of the warehouse and is granted full liberty to take such action, as he may deem fit and necessary, to obtain gainful use thereof.
Matter closed.
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2020 (8) TMI 829 - ITAT DELHI
Limited scrutiny - Disallowance u/s. 14A - conversion of the case from limited scrutiny to complete scrutiny go beyond the reasons of the limited scrutiny - limited scrutiny included for investment and income relating to securities are duly disclosed or not - HELD THAT:- In the present case, the case of the assessee was picked up for limited scrutiny for the reasons stated above. The reasons did not speak about any disallowance of expenditure u/s. 14A of the Act. If the AO wanted to go beyond the reasons of the limited scrutiny, then he should have invoked the provisions of complete scrutiny by obtaining the necessary approvals.
In this case, no such approval or conversion of the case from limited scrutiny to complete scrutiny was shown. Undisputedly, case of the assessee was for limited scrutiny and the reasons for picking up of the case of assessee under limited scrutiny does not include the disallowance of expenditure u/s. 14A of the Act, hence, we cannot uphold the disallowance made by the AO and confirmed by the Ld. CIT(A). In the result, we direct the Assessing Officer to delete the disallowance made u/s. 14A of the Act read with Rule 8D - Decided in favour of assessee.
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2020 (8) TMI 828 - ITAT MUMBAI
Additions under Section 145A - unutilized CENVAT credit to the closing stock - HELD THAT:- We restore the matter back to the file of Ld. AO on similar lines to redo the computations in accordance with earlier years as per the directions of the Tribunal. [2011 (9) TMI 261 - ITAT MUMBAI] - This ground stand allowed for statistical purposes.
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2020 (8) TMI 827 - SUPREME COURT
Interplay between the provisions of the Code of Criminal Procedure and the Drugs and Cosmetics Act, 1940 - Whether in respect of offences falling under chapter IV of the Act, a FIR can be registered Under Section 154 of the Code of Criminal Procedure and the case investigated or whether Section 32 of the Act supplants the procedure for investigation of offences under Code of Criminal Procedure and the taking of cognizance of an offence Under Section 190 of the Code of Criminal Procedure?
HELD THAT:- It is concluded that:-
I. In regard to cognizable offences under Chapter IV of the Act, in view of Section 32 of the Act and also the scheme of the Code of Criminal Procedure, the Police Officer cannot prosecute offenders in regard to such offences. Only the persons mentioned in Section 32 are entitled to do the same.
II. There is no bar to the Police Officer, however, to investigate and prosecute the person where he has committed an offence, as stated Under Section 32(3) of the Act, i.e., if he has committed any cognizable offence under any other law.
III. Having regard to the scheme of the Code of Criminal Procedure and also the mandate of Section 32 of the Act and on a conspectus of powers which are available with the Drugs Inspector under the Act and also his duties, a Police Officer cannot register a FIR Under Section 154 of the Code of Criminal Procedure, in regard to cognizable offences under Chapter IV of the Act and he cannot investigate such offences under the provisions of the Code of Criminal Procedure.
IV. Having regard to the provisions of Section 22(1)(d) of the Act, we hold that an arrest can be made by the Drugs Inspector in regard to cognizable offences falling under Chapter IV of the Act without any warrant and otherwise treating it as a cognizable offence. He is, however, bound by the law as laid down in D.K. Basu [1996 (12) TMI 350 - SUPREME COURT] and to follow the provisions of Code of Criminal Procedure.
V. It would appear that on the understanding that the Police Officer can register a FIR, there are many cases where FIRs have been registered in regard to cognizable offences falling under Chapter IV of the Act. We find substance in the stand taken by learned Amicus Curiae and direct that they should be made over to the Drugs Inspectors, if not already made over, and it is for the Drugs Inspector to take action on the same in accordance with the law. We must record that we are resorting to our power Under Article 142 of the Constitution of India in this regard.
VI. Further, we would be inclined to believe that in a number of cases on the understanding of the law relating to the power of arrest as, in fact, evidenced by the facts of the present case, police officers would have made arrests in regard to offences under Chapter IV of the Act. Therefore, in regard to the power of arrest, we make it clear that our decision that Police Officers do not have power to arrest in respect of cognizable offences under Chapter IV of the Act, will operate with effect from the date of this Judgment.
VII. We further direct that the Drugs Inspectors, who carry out the arrest, must not only report the arrests, as provided in Section 58 of the Code of Criminal Procedure, but also immediately report the arrests to their superior Officers.
Appeal dismissed.
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