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Showing 121 to 140 of 2184 Records
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2018 (5) TMI 2070
Fee for technical services u/s 9(1)(vii) - amount received by assessee as standby maintenance charges was not in nature of 'Fee for technical services' under section 9(1)(vii) - After treating the amounts to be in the nature of ‘business income’, the CIT(A) held that the same are liable to be taxed in India vis-a-vis the turnover arising to the assessee with reference to the Indian business connection - HELD THAT:- We find that the issue regarding the nature of services came-up before the Tribunal for the first time in Assessment Years 1998-99 to 2000-01, and vide order dated 06.02.2015 [2015 (2) TMI 454 - ITAT MUMBAI] it was held that the same are not in the nature of ‘fee for technical services’. Subsequently, for Assessment Years 2001-02 to 2008-09, the matter again came-up before the Tribunal, and vide order dated 15.06.2015, the amount has been held not to be in the nature of ‘fee for technical services’ u/s 9(1)(vii)
Therefore, following the decision of the Tribunal in assessee’s own case for the earlier years, so far as the Grounds raised by the Revenue are concerned, we find no reasons to interfere with the decision of the CIT(A), which is in line with the precedents in assessee’s own case by way of orders of the Tribunal (supra).
Computation of the income from standby maintenance activities attributable in India - HELD THAT:- We find that the standby maintenance charges recovered by the assessee from TCL only qua the length of cable in the territorial waters of India needs to be considered for computing the profits or income accruing to the assessee u/s 9(1)(i) of the Act. The reasoning advanced by the Revenue to the effect that the standby maintenance charges are linked to the cable capacity is of no consequence for the present inasmuch as what is required to be decided is the income attributable to the business connection in India, which possibly is the length of the cable in the territorial waters of India. Therefore, in our view, it is only the revenue from TCL which is on account of standby maintenance charges proportionate to the cable length in India that deserves to be considered for computing the profit or loss from standby maintenance activity attributable to India in terms of Sec. 9(1)(i) of the Act. Therefore, on this aspect, we uphold the plea of the assessee and direct the Assessing Officer to verify the calculation made by the assessee in this regard in its computation of income and recompute the income accordingly. Thus, on this aspect, assessee succeeds as above.
Charging of interest u/s 234B - HELD THAT:- As a settled proposition in terms of the judgment of Hon'ble Bombay High Court in the case of NGC Network Asia LLC, [2009 (1) TMI 174 - BOMBAY HIGH COURT] that there would be no chargeability of interest u/s 234B of the Act as the receipts on account of standby maintenance charges from TCL are subjected to withholding tax u/s 195 of the Act. On this aspect, it was also a common point between the parties that the said proposition has also been affirmed by the Tribunal in assessee’s own case in the orders dated 06.02.2015 [2015 (2) TMI 454 - ITAT MUMBAI] and also 15.06.2015 (supra). Thus, on this aspect, assessee succeeds.
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2018 (5) TMI 2069
TP Adjustment - Application of TNMM - computing the operating margin of the Appellant and those of the comparable companies selected for benchmarking purposes - choosing certain comparable companies despite such companies failing the legally required parameters such as, but not limited to, functional dissimilarity, quantitative filters and non-availability of data - HELD THAT:- As decided are M/S ICON CLINICAL RESEARCH INDIA PVT. LTD VERSUS THE DY. COMMISSIONER OF INCOME TAX COMPANY CIRCLE II (3) CHENNAI [2016 (9) TMI 1592 - ITAT CHENNAI] the change in the factors came about on account of drop in the capacity utilization of the assessee to 47% during the relevant assessment year - a perusal of the report of the Reserve Bank of India (RBI) clearly shows that during the assessment year 2013-14, the capacity utilization as per RBI’s report is 75%. This being so, admittedly assessee is entitled to have the benefit of capacity utilization adjustments. However, as it has been pointed out that the data in respect of capacity utilization is not available on account of non-availability of variable data, liberty is granted to the assessee to obtain the variable data and prove the claim before the TPO, who has to consider the same and grant the assessee the benefit of the adjustments towards capacity utilization. Consequently, grounds No.6 & 7 of the assessee’s appeal stands allowed.
Adjustments on account of depreciation so as to determine the aggregate cash profit margins - The same is to be determined by adopting pre-depreciation figures in respect of comparables in line with the decision of Co-ordinate Bench of this Tribunal in the case of M/s.ICON Clinical Research India Pvt. Ltd. Vs. The DCIT referred to supra. Consequently, ground No.8 of the assessee stands allowed.
Payments for Corporate Services availed by the assessee from its A.Es - HELD THAT:- Admittedly the business of the assessee is a consolidated one. The services referred under ‘Corporate Services” are intrinsically linked to its manufacturing and sales activity. These two services cannot be separately demarcated. Corporate services are the services rendered, which has helped the assessee in generating the business in respect of marketing and trading. This being so, in view of the decision of Hon’ble Delhi High Court in the case of CIT vs. EKL Appliances Ltd [2012 (4) TMI 346 - DELHI HIGH COURT] the ld. Assessing Officer is directed to allow the assessee’s claim of the Corporate Services expenditure incurred by assessee.
Disallowance of the Sales Commission paid by the assessee to its sister concern in Bonfiglioli Deutschland GmbH (BD), Germany - HELD THAT:- Perusal of the agreement between the assessee and the Germany counterpart clearly shows that the agreement has been entered into in 2009. Consequent to the said agreement, the sales commission has been paid and the same has also been allowed during immediately preceding assessment years 2010-11, 2011-12 & 2012-13. The Revenue has not been able to bring any new fact, which has led to change the present stand for the purpose of disallowing sales commission. This has been so, we find no reason to change the existing position and the ld. Assessing Officer is directed to allow the assessee’s claim in respect of the sales commission paid to BD. In these circumstances, ground No.14 of the assessee’s appeal stands allowed
Employees’ contribution to Provident Fund (PF) - HELD THAT:- As it is noticed that the issue is squarely covered by the decision of Hon’ble Madras High Court in the case of C.I.T v. Salem CoOperative Spinning Mills Ltd.[2001 (12) TMI 11 - MADRAS HIGH COURT] ld. Assessing Officer is directed to allow the assessee’s claim of payment of PF and ESI, which has been made within the grace period provided under the relevant statutes.
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2018 (5) TMI 2068
Accepting on record a Parliamentary Standing Committee's Report - breach of privilege of Parliament - restrictions in its reference and use as per the parliamentary privileges enjoyed by the Legislature of this country? - invitation of contempt of House in traversing and questioning the reports - Parliamentary Privileges - Privileges of House of Commons - Role of Parliamentary Committees - Publication of Parliamentary Reports - Rules and Procedures regarding Permission for giving evidence in Courts regarding proceedings in parliament - applicability of Indian Evidence Act, 1872 in the context of Parliamentary Proceedings - nature and extent of Parliamentary privileges regarding reports of Committees of British Parliament - exclusionary rules how far applicable in the Indian context - separation of powers and maintaining a delicate balance between the Legislature, executive and Judiciary - Article 121 and 122 of Constitution of India - comments on reports of parliamentary committee whether breach of privilege - adjudication of Courts and Parliamentary Committee Report.
HELD THAT:- Following conclusions are reached:
(i) According to Sub-clause (2) of Article 105 of Constitution of India no Member of Parliament can be held liable for anything said by him in Parliament or in any committee. The reports submitted by Members of Parliament is also fully covered by protection extended Under Sub-clause (2) of Article 105 of the Constitution of India.
(ii) The publication of the reports not being only permitted, but also are being encouraged by the Parliament. The general public are keenly interested in knowing about the parliamentary proceedings including parliamentary reports which are steps towards the governance of the country. The right to know about the reports only arises when they have been published for use of the public in general.
(iii) Section 57(4) of the Indian Evidence Act, 1872 makes it clear that the course of proceedings of Parliament and the Legislature, established under any law are facts of which judicial notice shall be taken by the Court.
(iv) Parliament has already adopted a report of "privilege committee", that for those documents which are public documents within the meaning of Indian Evidence Act, there is no requirement of any permission of Speaker of Lok Sabha for producing such documents as evidence in Court.
(v) That mere fact that document is admissible in evidence whether a public or private document does not lead to draw any presumption that the contents of the documents are also true and correct.
(vi) When a party relies on any fact stated in the Parliamentary Committee Report as the matter of noticing an event or history no exception can be taken on such reliance of the report. However, no party can be allowed to 'question' or 'impeach' report of Parliamentary Committee. The Parliamentary privilege, that it shall not be impeached or questioned outside the Parliament shall equally apply both to a party who files claim in the court and other who objects to it. Any observation in the report or inference of the Committee cannot be held to be binding between the parties. The parties are at liberty to lead evidence independently to prove their stand in a court of law.
(vii) Both the Parties have not disputed that Parliamentary Reports can be used for the purposes of legislative history of a Statute as well as for considering the statement made by a minister. When there is no breach of privilege in considering the Parliamentary materials and reports of the Committee by the Court for the above two purposes, we fail to see any valid reason for not accepting the submission of the Petitioner that Courts are not debarred from accepting the Parliamentary materials and reports, on record, before it, provided the Court does not proceed to permit the parties to question and impeach the reports.
(viii) The Constitution does not envisage supremacy of any of the three organs of the State. But, functioning of all the three organs is controlled by the Constitution. Wherever, interaction and deliberations among the three organs have been envisaged, a delicate balance and mutual respect are contemplated. All the three organs have to strive to achieve the constitutional goal set out for 'We the People'. Mutual harmony and respect have to be maintained by all the three organs to serve the Constitution under which we all live.
(ix) We are of the view that fair comments on report of the Parliamentary Committee are fully protected under the rights guaranteed Under Article 19(1)(a). However, the comments when turns into personal attack on the individual member of Parliament or House or made in vulgar or abusive language tarnishing the image of member or House, the said comments amount to contempt of the House and breach of privilege.
(x) The function of adjudicating rights of the parties has been entrusted to the constituted courts as per Constitutional Scheme, which adjudication has to be made after observing the procedural safeguards which include right to be heard and right to produce evidence. Parliament, however, is not vested with any adjudicatory jurisdiction which belong to judicature under the Constitutional scheme.
(xi) Admissibility of a Parliamentary Committee Report in evidence does not mean that facts stated in the Report stand proved. When issues of facts come before a Court of law for adjudication, the Court is to decide the issues on the basis of evidence and materials brought before it.
The questions having been answered, let these writ petitions be listed before the appropriate Bench for hearing.
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2018 (5) TMI 2067
TP Adjustment - AR contended that the amount of transfer pricing adjustment as computed but not separately added in respect of Software development services and Software consultancy services etc. is the consequence of the first step of determination of the ALP of these international transactions followed by considering their impact on the transfer pricing adjustment in the international transaction of `Management fee’ - HELD THAT:- As argued that if the Bench is to remit the matter back to the TPO, then fresh determination of all such transactions should be ordered. DR did not object to the proposal of the ld. AR for ordering a fresh determination of ALP of all such international transactions to the AO/TPO - as added that if in such fresh exercise, certain additions get required to be made in the international transactions in which earlier the transfer pricing adjustments were computed but no additions were made in the final assessment order, then there should be no embargo on the power of the AO/TPO to make such additions. AR candidly conceded to this proposition. In view of the rival but common submissions, we set aside the impugned order and remit the matter to the file of AO/TPO for determining a fresh ALP of all the international transactions, including, those for which no addition was made in the final assessment order though the amount of transfer pricing adjustment was computed by the TPO. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings.
Capitalization of software licence fee - AO Treated such payment as leading to generating an intangible asset. After allowing depreciation @ 25%, he made an addition - HELD THAT:- The issue raised through this ground is of recurring nature. The Tribunal in its order [2017 (8) TMI 281 - ITAT DELHI] for the assessment year 2007-08 dealt with it and eventually deleted the addition made by the Assessing Officer. Relevant discussion has been made. For assessment year 2009-10 also [2018 (4) TMI 444 - ITAT DELHI] the Tribunal has repeated its earlier view in deleting the addition. Since the facts and circumstances of the instant ground are mutatis mutandis similar to those of the preceding years, respectfully following the precedent, we order to delete the addition made by the Assessing Officer by capitalizing payment made by the assessee to Aircom, UK and then making disallowance after allowing depreciation thereon.
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2018 (5) TMI 2066
Transfer the investigation of a criminal case to the Central Bureau of Investigation - illegal manufacture and sale of Gutkha and Pan Masala, containing Tobacco and/or Nicotine - HELD THAT:- The High Court has justly transferred the investigation to CBI after due consideration of all the relevant aspects, which approach is consistent with the settled legal position expounded in the decisions adverted to in the impugned judgment, including the decision in SUBRATA CHATTORAJ VERSUS UNION OF INDIA [2014 (10) TMI 328 - SUPREME COURT] which predicates that transfer of investigation to CBI does not depend on the inadequacy of inquiry/investigation carried out by the State police. We agree with the High Court that the facts of the present case and the nature of crime being investigated warrants CBI investigation - the conclusion reached by the High Court that in the peculiar facts and circumstances of the case, it is but appropriate that investigation of the crime in question must be entrusted to CBI, is upheld.
The transfer of investigation of the crime in question to CBI is no reflection on the efficiency or efficacy of the investigation done by the State Vigilance Commission - SLP dismissed.
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2018 (5) TMI 2065
Estimation of income - bogus purchases - non rejection of books of accounts - HELD THAT:- In the instant case, the AO has issued notice u/s 133(6) to four parties which were returned by the postal authorities as ‘unserved’. Then he mentions that the appellant has made purchases from unrecognized parties. The estimation of profit by the AO @ 12.5% on the above amount is devoid of any substance. There is no basis for estimating income without rejecting the books of accounts.
The ratio laid down in the decision in Nikunj Eximp Enterprises (P.) Ltd. [2013 (1) TMI 88 - BOMBAY HIGH COURT] is squarely applicable in the instant case. Respectfully following the same, we delete the disallowance made by the AO. - Decided in favour of assessee.
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2018 (5) TMI 2064
Depreciation treating the road under the category allowed as ‘intangible asset’ - HELD THAT:- We are in agreement with the contention of the CIT-DR/DR to the effect that the assessee is not the owner of the asset/road.The assessee made a huge investment for creation of the asset for Govt. Of India and simultaneously acquired certain rights in the property enabling it to earn income by way of collection of toll fee for a specified period, thus, in the process, recovering of its cost of investment with certain amount of profit. In any way, for the assessee, BOT road, bridges etc. as intangible asset and the assessee is claiming depreciation on the very same asset created with its own expenditure. Thus, such an intangible asset comes within the expression ‘other business or commercial rights’. Thus, in our view it falls within the category of any other business or commercial rights of similar nature as provided u/s 32(1)(ii).
In the present appeal, the assessee claimed depreciation on road as plant and machinery which was disallowed by the Ld. AO on the plea that the assessee is not the owner of the toll road, hence not eligible for depreciation. To this extent, that the assessee is not the owner of the asset/road, we agree with the contention of the AO as well as the ld. CIT-DR/DR.
The issue before us falls within the category of intangible asset. Commissioner of Income Tax (Appeal) allowed depreciation as a building instead of plant and machinery. We feel this is neither building nor a plant and machinery rather the claim of depreciation to the assessee is allowable in the category of commercial rights of similar nature being intangible asset as provided u/s 32 (1)(ii) of the Act. To this extent, only, the additional ground raised by the assessee is allowed at applicable rate of deprecation i.e. @ 25%. As further noted the present road is since 2008-09 and license was granted to the assessee in terms of collecting tax/tolls and the Tribunal for Assessment Year 2008-09, decided the issue in favour of the assessee.
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2018 (5) TMI 2063
Levy of penalty u/s 77 and 78 of FA - Non-payment of service tax - Renting of Immovable Property Service - Transportation of Goods by Road Service - conscious suppression of facts or not - reverse charge mechanism - HELD THAT:- The main allegation is that on scrutiny of records it was revealed that the appellant had not paid service tax on ‘Renting of Immovable Property Service’ and ‘Transportation of Goods by Road Service’. It has also been alleged that the appellant has consciously suppressed the fact from the Department - the allegation against the appellant for invocation of Section 78 of the Finance Act, 1994 is without any material on record. It is well settled that the Department has to place some material on record of suppression of facts with intent to evade payment of service tax etc. In the present case the appellant paid the taxes before issuance of the show cause notice and therefore imposition of penalty under Section 78 of the Act is not warranted.
The impugned order is modified to the extent that penalty under Section 78 is set aside and penalty under Section 77 is upheld - Appeal allowed in part.
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2018 (5) TMI 2062
Claim of expenditure u/s. 57 - disallowing the Cost of Operation against which the appellant has earned income during the year under appeal - HELD THAT:- A perusal of the sub-contract as also the Invoice clearly shows that the area is an estimated quantity only. This being so, we find no reason to disallow the expenditure nor is there any evidence to show that the transaction entered into between the assessee and M/s.Coastal Projects Pvt. Ltd., was not genuine. In these circumstances, the addition as made by the AO in respect of the subcontracting of the contract work to M/s.Coastal Projects Pvt. Ltd. representing the expenses claimed towards cost of operation stands deleted.
Disallowance of the expenditure towards interest disallowed - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench of this Tribunal, the issue is restored to the file of the AO for re-adjudication [2018 (5) TMI 2061 - ITAT CHENNAI]
Disallowing the Cost of Operation against which the appellant has earned income during the year under appeal - HELD THAT:- . A perusal of the Assessment Order clearly shows that the assessee did not have adequate opportunity to substantiate its claim before the AO. This being so, the issue in respect of the addition is restored to the file of the AO for re-adjudication. Here, it is to be kept in mind that an addition cannot be made merely on the basis of a statement recorded or a unsupported disclosure made by an assessee in the statement recorded in the course of a survey. Assessment is to be made on the basis of evidences. In regard to the issue of the disallowance of the interest expenditure u/s.57, it is noticed that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of the sister concern company M/s.Arohi Infrastructure Pvt. Ltd., and M/s.Aparti Constructions Pvt. Ltd., referred to supra, which is also been extracted earlier. In these circumstances, on identical findings, the issue in this appeal is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case. Consequently, the appeal filed by the assessee is partly allowed for statistical purposes
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2018 (5) TMI 2061
Interest income under the head other sources and claimed the interest paid under section 57 - Non-representation before the Ld.CIT(A) by assessee - HELD THAT:- The assessee have not represented its case before the Ld.CIT(A). The reason for non-representation before the Ld.CIT(A) has been clarified by the Ld.AR stating that the Managing Director of the assessees company was in substantial problems which had resulted in him not being able to give adequate attention.
Considering the fact that all the details in respect of the issue have not been considered by the AO and the fact that the assessee have not represented before the Ld.CIT(A) by restoring the issue to the file of the Ld.CIT(A), it would not serve any purpose in so far as any evidence produced before the Ld.CIT(A) on this issue would have to be sent to the AO for his Remand Report - we are of the view that the issue in this appeal is liable to be restored to the file of the AO for re-adjudication.
AO is to verify whether the loan has actually been taken from the holding company and whether the interest has been paid to such holding company. If the loan has been taken by the assessees from any source and the assessees have paid interest on such loans taken clearly, if the assessees have used such loans for the purpose of giving further loans then the interest paid is liable to be allowed and it is only the net of the interest which is liable to be assessed as the income of the assessees. Appeals filed by the assessee are partly allowed for statistical purposes.
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2018 (5) TMI 2060
Utilization of from the common pool account towards discharging their service tax liability - HELD THAT:- The appellants are engaged in the manufacture of excisable goods and also providing various services for which they are also registered with the Service Tax Department. The appellant has availed cenvat credit on inputs, capital goods and also input services and maintained a common account/Register, while discharging excise duty on the clearance of finished goods also service tax on output service, they utilized the cenvat credit from the input common pool account. When the amount was utilized from the common pool account, then cenvat credit is eligible.
Appeal allowed.
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2018 (5) TMI 2059
Correct head of income - Interest amount as assessable as income from other sources - Interest income earned by depositing the share capital money against the interest expenses - capital gain or income from other sources - HELD THAT:- As decided in own case [2017 (12) TMI 192 - ITAT HYDERABAD] the interest income earned by assessee by depositing the share capital in Fixed Deposits under constraint are eligible to treat the income as capital in nature and allowed to set off against the pre-commencement expenses during the year. Accordingly, grounds raised by the assessee are allowed.
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2018 (5) TMI 2058
Valuation - inclusion of subsidy amounts in the value of the goods cleared by the appellants - appellant was required to deposit VAT/CST/SGST as per the applicable rate and in terms of Rajasthan Investment Promotion Scheme - HELD THAT:- An identical issue has came up before the Tribunal in a number of cases including GREENLAM INDUSTRIES LTD, MARUDHAR POLYSACKS PVT LTD, VAISHNO WIRE PVT LTD, MAHARAJA CABLES, WELLMAC PLASTICS PRIVATE LIMITED, SRV INTERNATIONAL PVT LTD, STAR GLOBAL ENDURA LTD, ALLIANCE POLYSACKS PVT LTD. VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE-JAIPUR-I, C.C.E. & S.T. JAIPUR-I [2018 (4) TMI 1787 - CESTAT NEW DELHI] where it was held that there is no others justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans.
Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 2057
Surcharge and education cess as part of the income-tax - According to the Ld. D.R., from the gross amount so arrived, the amount of credit available under Section 115JB on account of income-tax, surcharge and education cess have to be deducted and the net tax payable after setting off credit available under Section 115JB of the Act has to be worked out - HELD THAT:- It is not in dispute that if surcharge and education cess form part of incometax, then it has to be adjusted against the tax liability under the MAT scheme. Article 271 of the Constitution of India in categorical term says that surcharge and education cess include income-tax. This was also clarified by the Apex Court in the case of K. Srinivasan [1971 (11) TMI 2 - SUPREME COURT] Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Appeal filed by the Revenue is dismissed.
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2018 (5) TMI 2056
Revision u/s 263 - AO has not discussed the issue with respect to levy of interest U/s.234A(3) of the Act and the issue with respect to crystallization of the expense incurred towards wage arrears - HELD THAT:- AO has not examined the agreement between the assessee and its employees with respect to the wage arrears, the terms & conditions of the employment of the assessee’s employees etc. In these circumstances, we are of the considered view that the Ld.PCIT was very much right in his realm to invoke his jurisdiction U/s.263 of the Act by relying on the decisions cited in his order.
It is pertinent to mention that the decisions relied by the Ld.AR is not applicable to the facts of the case of the assessee because in the case of the assessee, the Ld.AO has omitted to examine certain material facts which might influence while deciding the issues. Therefore we hereby sustain the order of the Ld.PCIT U/s.263 of the Act. However we also hereby direct the Ld.AO to examine the issues without being prejudiced by the order of the Ld.PCIT and pass appropriate order based on merits and law after affording sufficient opportunity to the assessee of being heard.
Appeals filed by the assessee are dismissed.
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2018 (5) TMI 2055
Entitlement to deduction u/s 35 (2AB) - expenditure incurred for its R&D Centre at Rohtak - approval was granted in 2015 - assessee claim the deduction since inception i.e. AY 2011-12 - as per HC Petitioner is entitled to deduction under Section 35 (2AB) of the Act for the expenditure in respect of its Rohtak R&D Centre as per the provisions of Section 35 (2AB) for AYs 2011-12, 2012-13 and 2013-14 - HELD THAT:- SLP dismissed. Pending applications, if any, shall stand disposed of.
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2018 (5) TMI 2054
Exemption u/s 11 - cancelling the registration granted u/s 12A(a) - CIT(Exemptions) cancelling the registration granted under Section 12A(a), solely on the basis of observation made by the AO during the assessment proceedings as noted a large number of discrepancies in the accounts and affairs of the assessee society and rejected the claim of exemption and held its income to be taxable of AOP - DGIT has withdrawn the approval u/s 10(23C)(vi) on account of various irregularities pointed out by him and holding that the activities of the institution are not run solely for education and run for profit - there are violations regarding norms of Registrar of Societies and norms of AICTE and assessee misconducted itself by claiming that it is approved u/s 35(1)(iii) and donations made to it enjoy income tax exemption - HELD THAT:- As objects of the assessee society being education in nature and fall within the meaning of charitable purpose u/s 2(15) of the I.T. Act and since the society was registered u/s 12A allowed the claim of exemption u/s 11 of the I.T. Act. Since the appeal filed by the Revenue has already been dismissed by the Tribunal and upheld by the Hon'ble High Court and the assessee society is imparting education which is not in dispute, therefore, ld. CIT, in our opinion, is not justified in cancelling the registration granted earlier by invoking provisions of section 12AA(3) of the I.T. Act. The addition, if any, can be made by the Assessing Officer in the regular assessment but registration cannot be cancelled only on the basis of certain violations by the trustees unless and until it is proved that the assessee trust is not fulfilling its main object of imparting education.
As relying on M/S. ISLAMIC ACADEMY OF EDUCATION [2015 (9) TMI 450 - KARNATAKA HIGH COURT] and considering the fact that the assessee trust is imparting education as per its main objects, we are of the opinion that the ld. CIT is not justified in cancelling the registration u/s 12AA(3) of the I.T. Act. We accordingly set-aside the order of the ld. CIT and restore the registration granted earlier. Decided in favour of assessee.
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2018 (5) TMI 2053
Deduction under section 80IB(10) - proportionate deduction - block less than the prescribed eligible area - HELD THAT:- Some of the flats constructed by the assessee are in excess of area of 1000 sq. ft. and the assessee has allotted more than one flat to some of the buyer or their relative. The assessee has reduced its claim to the extent of flat constructed in excess of 1000 sq.ft. as well as in case where more than one residential unit in housing project is allotted to the person being individual or his family member.
CIT(A) by following the decision of Viswas Promoters (P.) Ltd. [2012 (11) TMI 1117 - MADRAS HIGH COURT] directed the Assessing Officer to allow the proportionate deduction under section 80IB (10) wherein held that assessee is entitled for deduction under section 80IB(10) on proportionate basis in respect of those block which are less than the prescribed eligible area. Further in case of Sreevatsa Real Estates (P.) Ltd. [2012 (11) TMI 633 - MADRAS HIGH COURT] held that where some of the residential units developed by assessee exceeded area of 1500 sq. ft., it was entitled to claim deduction under section 80-IB(10) pro rate for housing units having area of less than 1500 sq.ft., Bangalore Tribunal in case of SJR Builders [2009 (8) TMI 953 - BANGALORE TRIBUNAL COURT] held that merely because some flats were larger than the specified limit of 1500 sq.ft., the assessee would not lose the benefit in its entirety. Only with reference to the flats which had more than the prescribed area, the assessee would lose the benefit.
We find that there is no illegality and infirmity in the order passed by ld. CIT(A) in directing the Assessing Officer to allow the proportionate deduction under section 80IB(10). No contrary, the decision is brought on record the notice to take the different view. In the result, ground of appeal raised by Revenue is dismissed.
Disallowance u/ 14A r.w.r. 8D - contention of assessee before the lower authority was that the assessee made investment on certain fund as strategic partner in joint venture - HELD THAT:- Recently, the Hon’ble Supreme Court in case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] held that the dominant purpose for which investment into shares is made by assessee may not be relevant as section 14A applies irrespective of whether shares are held to gain control or as stock-in-trade, where shares are held as stock-in-trade, main purpose is to trade in those shares and earn profits therefrom and, in process, certain dividend is also earned which is tax exempt under section 10(34); expenditure attributable to exempt dividend income will have to be appointed to be disallowed under section 14A
Disallowance u/s 14A to the Book profit for the purpose of calculating MAT u/s 115JB - Also in ACIT Vs Vireet Investment (P.) Ltd.. [2017 (6) TMI 1124 - ITAT DELHI] held that the Computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to computation as contemplated under section 14A read with rule 8D. Therefore, this ground of appeal is restored back to the file of assessing officer to pass the order afresh after considering the aforesaid two decisions. Needless to order that before passing the order the assessing officer shall grant sufficient opportunity to the assessee before passing the order in accordance with law. Hence, this ground of appeal raised by the revenue is allowed.
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2018 (5) TMI 2052
Addition u/s 153A - addition made by AO in the course of the scrutiny of the assessment - whether no fresh relating material was discovered during the search and seizure proceedings under Section 132 of the Act to justify the addition under Section 154A? - HELD THAT:- A similar set of appeals on identical question were dismissed , [2018 (4) TMI 401 - DELHI HIGH COURT] wherein held the assessments can be said to be pending only if the AO is statutorily required to do something further. If the section 143(2) notice has been issued, the assessment can be said to be pending. However an assessment which has been contested up to the High Court cannot be said to be pending.
The power given by the first proviso to assess income for six assessment years has to be confined to the undisclosed income unearthed during search and cannot include items which were disclosed in the original assessment proceedings. A perusal of the assessment order passed u/s 153A of the Act reveals that the AO has not made any reference whatsoever to any incriminating material found as a result of the search and the addition has been made entirely on the basis of allegation of accommodation entry which in turn is based on some material said to have been gathered from stock exchange but which does not specifically point out towards the assessee. The Court is of the opinion that the application of case KABUL CHAWLA [2015 (9) TMI 80 - DELHI HIGH COURT] in the circumstance was justified. In these circumstances, no question of law arises.
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2018 (5) TMI 2051
Mahua De-oiled cake/ De-oiled Rice Bran being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds - 'Waste generated' during the Solvent Extraction process or not - input credit of GST paid on purchase of Mahua Oil Cake/ Rice Bran Oil - HELD THAT:- From Classification of various goods it can be seen that de-oiled mahua cake and de-oiled rice bran emerging as by-products after the process of manufacture fall under HSN 2308 and 2309 - Mahua de-oiled cake has been described rich in sugers, nitrogen & proteins but also there is presence of some toxic saponins which limits its usages as fish or cattle feed. However, on mixing further with some other vegetable and cereal waste its usage in cattle feeding and fish feeding are usual in practice. De-oiled rice bran has been seen in its usage in largely cattle feed, poultry & fish feed.
Thus, de-oiled cake which is used for animal feed has been exempted by the entry 102 and de-oiled rice bran has been specifically exempted under 102A.
Input tax credit - HELD THAT:- The Input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil is partially allowed as per process/ formula prescribed in the Chapter V (INPUT TAX CREDIT) of GST Rule, 2017, because, the applicant manufacturing both taxable and exempted goods by using raw materials viz. Mahua De-oiled cake and De-oiled Rice Bran. Further, if common inputs are used for both taxable and exempted supplies, the applicant is required to reverse the credit proportional to the amount of credit pertaining to the exempted supplies immediately.
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