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Showing 121 to 140 of 1861 Records
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2018 (6) TMI 1743
Revision u/s 263 - Levy of penalty u/s 271AAB - Non specification of sub clause of the provisions of Section 271AAB under which penalty imposed - HELD THAT:- AO initiated the penalty proceedings U/s 271AAB by issuing notice U/s 274 read with Section 271 of the I.T. Act, 1961 on 13/03/2015 wherein the penalty has been initiated “on assessed undisclosed income” as evident from copy of notice scanned at page No. 9 of this order. The Assessing Officer has not specified under which sub clause of Section the notice has been issued. Thus, it is clear from records that the assessee has not been sufficiently noticed about the sub clause of the provisions of Section 271AAB.
A.O. has not specified the sub clause in notice. In such a factual situation, in our considered view, the ratio laid down by the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000 (2) TMI 10 - SUPREME COURT] that an incorrect assumption of fact or an incorrect application of law will satisfy the requirement of the order being erroneous, shall not be applicable in this case.
In absence of a clear cut finding of ld. Pr.CIT on the basis of documents found and seized and statements recorded during the search, the Pr.CIT. was not justified in issuing such direction. The Pr.CIT cannot reach at a conclusion that the provisions of Section 271AAB (1)(c) are applicable in assessee’s case without clear and final finding on this issue. We would also like to hold that once the assessee has preferred the appeal against the order of Assessing Officer for levy of penalty u/s 271AAB of the Act, there is no scope for the ld. Pr.CIT to invoke the provisions of Section 263 of the Act to cover any legal lacuna. Moreover, in a situation where the assessee has been granted certificate under the Direct Tax Dispute Resolution Scheme, 2016 which continues to be valid then also provisions of Section 263 could not be invoked. We would also like to mention that once the certificate issued under DRS Scheme is withdrawn in future then the appeal of assessee before CIT(A) shall revive. In such a situation also the Pr.CIT shall not have jurisdiction to invoke provisions of Section 263 of the Act. There is no scope for treating the penalty order passed by the Assessing Officer as erroneous and prejudicial to the interest of revenue. Accordingly, the order U/s 263 of the Act passed by the ld. Pr.CIT is hereby quashed.
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2018 (6) TMI 1742
Reopening of assessment u/s 147 - Reassessment after expiry of four years by issuing notice under Section 148 - Disallowance u/s 14A - HELD THAT:- Disallowance under 14A of the Act in respect of exempted income earned by the assessee. AO admittedly computed the disallowance under clause (iii) of Rule 8D(2) of Income-tax Rules, 1962. Now the Assessing Officer claims that the disallowance ought to have been made under clause (ii) of Rule 8D(2). The fact remains that the assessee has filed details of investment and earning of exempted income.
It is for the Assessing Officer to apply the provisions of law and compute the disallowance under Section 14A of the Act as per the procedure prescribed under Rule 8D(2) of Income-tax Rules, 1962. The very fact that the Assessing Officer made disallowance only under clause (iii) of Rule 8D(2) and now intends to make disallowance under clause (ii) of Rule 8D(2), shows that there is a change of opinion. Moreover, there was no negligence on the part of the assessee in furnishing necessary material in completing the assessment. Hence, the Assessing Officer is not justified in reopening the assessment. Therefore, we are unable to uphold the orders of the authorities below. Accordingly, the orders of both the authorities below are set aside and the disallowance made by the Assessing Officer is deleted. Appeal filed by the assessee is allowed.
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2018 (6) TMI 1741
Admissibility of additional evidences - unexplained cash deposits - CIT(A) refusing admission of additional evidence under Rule 46A of I.T.Rules - case was selected for scrutiny on the basis of AIR Information regarding cash deposits in S.B. account by assessee without quoting PAN numbers in the A.Y. under appeal - HELD THAT:- Assessee did not produce these evidences before the A.O. at the assessment stage, therefore, A.O. pleaded that application for admission of additional evidence may be rejected. These facts makes it very clear that whatever evidences were filed by assessee at the appellate stage are relevant and goes to the root of the matter and may explain the source of cash deposits in the bank account of assessee. The same requires consideration and examination at the level of Ld.CIT(A). Once the additional evidences have been examined by the A.O. at the appellate stage and A.O. says that the claim of assessee is verifiable would support the claim of assessee that these documents were essential for just decision in the matter.
CIT(A) therefore instead of rejecting these additional evidences should have admitted the additional evidences for deciding the appeal on merits. Hon’ble Supreme Court in the case of Tek Ram [2013 (8) TMI 459 - SC ORDER] and Hon’ble P&H High Court in the case of Mukta Metal Works [2011 (2) TMI 250 - PUNJAB AND HARYANA HIGH COURT] admitted the additional evidences as being relevant and required to be looked into.
Thus Ld.CIT(A) should have admitted these additional evidences and decided the appeal of assessee on merits. Appeal of the assessee is allowed for statistical purposes.
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2018 (6) TMI 1740
Disallowance of the deduction u/s 54 against the Long Term Capital Gain - Whether assessee has acquired the new asset being residential house before the due date of filing the return of income U/s 139(4) and acquiring the new asset within the stipulated period of 2 year /3 years from the date of transfer of the existing asset? - as argued appellant had invested the Long Term Capital Gain in purchase of residential house property on 23.09.2012 (within the stipulated time of 3 years from the date of transfer.” - HELD THAT:- There is no dispute that the provisions of section 54 (2) of the Act stipulates the time period for making the investment in acquiring the new asset. In case the assessee has not made the investment in the new asset before the date of filing of return of income then the amount of capital gains is required to be deposited in capital gain accounts scheme on the date of filing of return U/s 139 and not later than due date of filing of return U/s 139(1).
Sub-section (2) stipulates that in case the assessee has not acquired new asset before the date of the filing of return of income U/s 139 of the Act then the amount of capital gain is required to be deposited in the capital gain account scheme before the date of filing of return and latest by the due date of filing of return U/s 139(1).
Following the decision of Hon’ble Punjab and Haryana High Court in case of CIT vs. Ms. Jagrity Agarwal [2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT], decision of Hon’ble Gauhati High Court in case of CIT vs. Rajesh Kumar Jalan [2006 (8) TMI 126 - GAUHATI HIGH COURT] as well as the decision of the Coordinate Bench of this Tribunal in case of Virendra Singh vs. ITO [2016 (3) TMI 823 - ITAT JAIPUR], we hold that when the assessee has acquired the new asset being residential house before the due date of filing the return of income U/s 139(4) of the Act then the substantial condition of acquiring the new asset within the stipulated period of 2 year /3 years from the date of transfer of the existing asset has been complied with and accordingly, the assessee is eligible for deduction U/s 54 - Appeal of the assessee is allowed.
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2018 (6) TMI 1739
Levy of for late filing fee under section 234E - intimation u/s 200A - Scope of amendment in section 200A - intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015 - Diversified views - HELD THAT:- We find that the alleged default pertain to financial year 2012-13 relevant to AY 2013-14. In similar circumstances, Hon’ble Karnataka High court in the case of Fatheraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] has considered the issue as the view taken by the Hon’ble High Court is that the amendment in section 200A of the Act with effect from 01.06.2015 is prospective and not retrospective. There is a contradictory view by the Hon’ble Gujarat High Court in the case of Rajesh Kaurani Vs. Union of India [2017 (7) TMI 458 - GUJARAT HIGH COURT] wherein it is held to be retrospective.
In view of the above position, we are of the view that one view is in favour of assessee and another view is against the assessee. Hence, following the decision of Hon’ble Supreme Court in the case of CIT vs. Vegetable Products Ltd.[1973 (1) TMI 1 - SUPREME COURT]we adopt the decision in favour of the assessee. Accordingly, we are of the view that the provision of section 200A of the Act has amended with effect from 01.06.2015 is prospective and not retrospective. Hence, the late filing fee under section 234E cannot be levied in the present AY. Hence, we delete the levy of fee and allow the appeal of the assessee.
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2018 (6) TMI 1738
Addition u/s 14A r.w.r. - Non recording of satisfaction by AO - HELD THAT:- A.O while dislodging the claim of the assessee that as no part of the expenses debited in the profit and loss account was relatable to earning of the exempt dividend income, thus no disallowance under Sec. 14A was called for in its hands, had failed to record his satisfaction as regards the correctness of such claim, having regard to the accounts of the assessee. Rather, we find that the A.O had dislodged the claim of the assessee that no disallowance under Sec. 14A was liable to be made in its hands by holding a conviction that it was beyond comprehension that no expense incurred by the assessee could be related to earning of exempt dividend income.
We are of the considered view that in the backdrop of the judgment in the case of Godrej & Boyce Manufacturing Co. Ltd. [2017 (5) TMI 403 - SUPREME COURT] it was obligatory on the part of the A.O to have recorded his satisfaction, having regard to the accounts of the assessee, as to why the latter claim that no expenditure was attributable to earning of the exempt dividend income was not to be accepted. - Decided in favour of assessee.
Addition on account of difference in the account of M/s Continental Warehousing Corporation (NS) Ltd. - CIT-A deleted the addition - HELD THAT:- The difference had arisen on account of non-posting of a TDS entry by the aforementioned party viz. Continental Warehousing Corporation (NS) Ltd, in the account of the assessee as appearing in its books of accounts. We find ourselves to be in agreement with the contention of the ld. A.R that the failure on the part of the aforesaid party to post the TDS entry leading to the impugned variance to the said extent, as against the balance shown by the assessee to be payable to the said party, will not have any bearing on the income of the assessee for the year under consideration - no addition in respect of the impugned variance was called for in the hands of the assessee.
Addition on account of “Opening balance" - difference in the account of the aforementioned party viz. M/s Continental Warehousing Corporation (NS) Ltd - HELD THAT:- We are of the considered view that as the difference in the opening balance had emerged on account of transactions pertaining to the preceding year/years, thus the same shall in no way have any bearing on the income of the assessee for the year under consideration. We thus, not finding ourselves to be in agreement with the view taken by the CIT(A), delete the addition.- Decided in favour of assessee.
Addition of the administrative expenses - on verification of the bills and vouchers pertaining to the administrative expenses, some bills/vouchers were found to be undated or unsigned and many vouchers were not supported with relevant bills - HELD THAT:- We find that though there is a mention by the lower authorities that some bills/vouchers pertaining to the administrative expenses were found to be undated or unsigned and many vouchers were not supported with relevant bills, but surprisingly there is not a mention of a single such bill/voucher which is found to be suffering from any such alleged infirmity. We are of the considered view that in the case before us, as there is no evidence which could support the claim of the A.O that some of the bills/vouchers were found to be undated or unsigned or not backed by relevant bills, it is difficult for us to subscribe to the disallowance made by him in the thin air. We thus, in the backdrop of our aforesaid observations are unable to uphold the adhoc disallowance - Decided in favour of assessee.
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2018 (6) TMI 1737
Violation of SEBI Act and the PFUTP Regulations - trading in the shares of Out of company - scrip of the company was an illiquid scrip and out of purchase and sale of 157 shares, some of the trades of the appellant were self trades and some trades had influenced the price of the scrip of the company by contributing the market net LTP (Last Traded Price) and some trades had also contributed to the NHP (New High Price) - Penalty imposed - HELD THAT:- The trades executed by the appellant had the effect of net positive LTP of ₹ 85.35. Very fact that the appellant had indulged in self trades/ LTP/ NHP without giving any justifiable reason, clearly justifies the inference drawn by the AO that the trades executed by the appellant were manipulative trades.
As held by the Apex Court in the case of SEBI V/s Kishore R. Ajmera [2016 (2) TMI 723 - SUPREME COURT] in the absence of direct evidence, by taking into account immediate and proximate facts and circumstances surrounding the events on which the charges/allegations are founded it is open to an AO to arrive at a reasonable conclusion that the trades executed were manipulated trades.
In the facts of the present case, in our opinion, no fault can be found with the decision of the AO that the trades executed by the appellant were manipulative trades and hence, the appellant was guilty of violating the SEBI Act and the PFUTP Regulations.
Argument advanced by the Representative of the appellant that the penalty imposed is excessively harsh is without any merit. Penalty imposable under Section 15HA of SEBI Act for violating the PFUTP Regulations is up to ₹ 25 crore. However, after taking into consideration all mitigating factors the AO has imposed penalty of ₹ 7 lac which cannot be said to be unreasonable or excessive.
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2018 (6) TMI 1736
TDS u/s 194J - TDS on discount and roaming charges - default u/s 201(1) - HELD THAT:- As decided in own case [2018 (5) TMI 582 - ITAT DELHI] in absence of any human intervention during the actual roaming process, payment would not be Fees for Technical services - Thus, payment made to other telecom operators should not be regarded as payment towards fees for technical service. No Tds liability - Decided in favour of assessee.
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2018 (6) TMI 1735
Addition made on account of interest expenditure - advancement of loans - HELD THAT:- We find that the assessee had advanced loan to AHPL for its business, that the financial institutions had advanced loans for a specific purpose, that the borrowed funds were utilised for those purposes only. It appears that the AO had not understood the real character of the loans availed by the assessee. He had not also considered overall availability of the loans sanctioned by the financial institutions.
FAA had given a finding of fact that borrowed funds were not utilised for the specific purposes and that the assessee had used its own funds for making investments. The available funds with it were in excess of the investments. Considering these facts, we are of the opinion that there is no need to interfere with the order of the FAA. So, confirming his order we decide the first effective ground of appeal against the AO.
Sale of Carbon Credits - capital receipts or business receipts - HELD THAT:- “Carbon credit” is not an offshoot of business but an offshoot of environmental concerns. No asset is generated in the course of business but it is generated due to environmental concern. ITAT agree with this factual analysis as the assessee is carrying on the business of power generation. The carbon credit is not even directly linked with power generation. On the sale of excess carbon credits, the income was received and hence as correctly held by the Tribunal it is capital receipt and it cannot be business receipt or income. See M/S. MY HOME POWER LTD., [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] . - Decided against revenue.
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2018 (6) TMI 1734
Admission made in the assessment proceedings by authorised representative - Whether admission made by the authorised representative is not binding on the assessee, is not absolute and correct proposition of law? - HELD THAT:- Admission made by the authorised representative in the proceedings having expressly or implied authority binds the assessee and therefore we have no iota of doubt that the statement made by the authorised representative binds the assessee - in our view, the jurist entity like the assessee before us, shall always be represented either through the Director or the MD or the Company Secretary or by any other person including the authorised person through a Board Resolution. If we hold that the Act of the representative does not bind the assessee, the very basis of working of the judicial system would collapse. Accordingly the judgment relied upon by the assessee is not binding - the statement made by the authorised representative, who has been expressly authorised by the assessee, binds the assessee.
If we look into the facts of the present case, the CIT (A), despite having adjudication, by the AO, on merit albeit reordering admission, has not adjudicated the grounds on merit and has decided the appeal merely on the basis of the admission made by the authorised representative. In the fitness of present case and peculiar facts of the case, we are of the opinion that the matter is required to be re-examined by the CIT (A) on merit as AO had decided the issues on merit and thereafter had recorded admission . Therefore we remand the matter back to the file of the CIT (A) for de-novo decision on all the grounds - Appeal of the assessee is allowed for statistical purposes.
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2018 (6) TMI 1733
Validity of the notice u/s. 143(2) - issue of notice by AO not having jurisdiction to assess assessee in terms of the territorial area assigned to him u/s. 120 - transfer of the assessee’s return by ITO, Ward II(3), Jalandhar to another ITO (at Jalandhar, where the assessee’s office is locate - HELD THAT:- The whole purport of law, as we see it, is from the standpoint as to whether any prejudice is caused to the assessee. The transfer of the assessee’s return by ITO, Ward II(3), Jalandhar to another ITO (at Jalandhar, where the assessee’s office is locate, and in fact, the ITO with whom he filed his return) would not make the issue of notice u/s. 143(2) by him on 15.09.2010 (or 21.09.2010) invalid. This is irrespective of whether the said transfer is prompted by the assessee’s objection-as contended by the assessee, or the transfer of the assessee’s PAN to the transferee ITO, as stated by the ld.CIT(A). There is no challenge, nor possibly could be, to the inherent competence of the ITO, Ward II(3) Jalandhar to issue a notice u/s. 143(2), which competence is in fact the same as that of any other ITO at Jalandhar or Kapurthala. Once, therefore, there is a valid assumption of jurisdiction to frame the assessment u/s. 143(3), by service of a valid notice u/s. 143(2) in time, the proceedings are to be taken to their logical conclusion.
The assessment by the ITO, Ward IV-(1), Jalandhar, with whom the assessee filed his return, and who received the assessee’s return from ITO, Ward II(3) Jalandhar on 21.07.2011, cannot therefore be faulted with. In fact, no further objection was raised by the assessee, with he rather participating in the assessment proceedings. How, then, could he challenge the jurisdiction of the ITO, Ward IV(1) Jalandhar – with whom he has in fact filed his return for the year, as his AO, in the appellate proceedings. The issue of notices u/ss. 142(1) and 143(2) by ITO, Ward IV(1) Jalandhar on 21.07.2011 is again in consonance with the law which contemplates issue of such notices on change of incumbency or succession in jurisdiction. The same is only an administrative mechanism to accord with the principles of natural justice, with section 129 even granting the assessee the right to insist on being reheard in the matter, i.e., to the extent already heard by the previous officer/s. - Decided against assessee.
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2018 (6) TMI 1732
Disallowance of provision of warranty - system of making of the provision for warranty by the Assessee-Company was not scientific and the reversal of the provision at the year end in view of the actual claims made by the customers was huge, varying from 23% to 100% and therefore, since the Assessee has not followed the scientific system of making a provision in this regard, the entire amount of provision deserves to be disallowed - HELD THAT:- As is well settled, the appeal u/s 260-A of the Act lies before this Court only on substantial questions of law. The final fact findings of the Tribunal under the Act are binding on this Court and cannot be disturbed unless they are found to be perverse on the basis of established material on record. We do not find any such case of Revenue in the present appeal.
We are satisfied that the practice of making a provision for warranty in the present case has been found to be consistent, scientific and regular by the two Appellate Authorities below in consonance with the judgment in the case of Rotork Controls India (P) Ltd. [2009 (5) TMI 16 - SUPREME COURT] - The Hon'ble Supreme Court in the aforesaid case, discussed in detail how the accounting entries for product warranty are to be made by the Assessees.
We are, therefore, satisfied that both the Appellate Authorities below were justified in returning the proper findings of facts on the relevant material before them and have rightly found that the provisions of warranty made by the Respondent-Assessee Company was on the basis of the scientific and consistent method and therefore, the present appeal of the Revenue does not give rise to any substantial question of law and the same deserves to be dismissed and is accordingly dismissed.
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2018 (6) TMI 1731
Unaccounted transaction of undisclosed receipts and undisputedly undisclosed expenditure outside the books of account - survey action u/s.133A - discovery of incriminating information and the papers/ documents relating to both the assessee under consideration - disclosure of additional income includes that the assessee earned unaccounted income on sale of stock and incurred unaccounted expenditure outside the books - HELD THAT:- Demand for the said adjustment in principle has the basis of the figures emanating from the impounded papers during the survey action. Assessee already offered the additional income of ₹ 2.06 crores and paid taxes on this. Over and above the same, AO made addition of ₹ 1.61 crores and the same is the subject of all this litigation. Therefore, there is no justification for rejecting the claim of adjustments.
It is well settled legal proposition that the contents of the incriminating papers have to be considered as a whole and not in a piece meal. AO cannot selectively consider some of the entries on said pages and not the others. It is also well observed practice of business that the Managing Director of the company do receive unaccounted receipts from the clients/company and keep with him in safe custody. Managing Director returns or spends the same for the company too. It is also not uncommon that such receipts are sometimes recouped outside the books of account, although the same constitutes unaccounted transactions. It is not correct to ignore these facts in business when we need to determine the net unaccounted income of the assessee.
Grant of benefit of contra entries allegedly kept with the Managing Director - In the absence of any other corroborative evidences, on the issue of one to one correlation, the end of the previous year-net figures need to be considered after set off of cash receipts and return after safe keeping is considered. As such, there is no legal requirement of establishing such one to one correlation of figures. Therefore, in the absence of any incriminating information with the AO to establish that cash given to Managing Director for safe keeping is not for business purposes, the safe keeping-centric explanation of the assessee needs to be accepted. Hence, in that case, the net expenditure figure of ₹ 3.28 crores is proper. To that extent, the order of the CIT(A) needs to be reversed.
Undisclosed expenditure u/s 69C - Excess undisclosed expenditure of ₹ 15,46,095/-, we find this amount needs to be added to the income returned by the assessee and not ₹ 1.61 crores as done originally in the assessment. Assessee has no objection on this issue. To that extent, the arguments of Ld. Counsel are allowed. Thus, the sum of ₹ 15,46,095/- is confirmed in place of ₹ 1.61 crores.
Cash flow in and out is the part of safe keeping and the request for adjustment of undisclosed expenditure to the tune of ₹ 82,94,744/- is allowed. Therefore, the undisclosed expenditure works out to ₹ 3.28 crores only (i.e. ₹ 4.11 cr – 0.83 cr) and not ₹ 4.11 crores (rounded off). Further, also, the excess expenditure spent works out to ₹ 15,46,095/-. At the end, we confirm to the extent of ₹ 15,46,095/- only in place of ₹ 1.61 crores. To that extent, the order of the CIT(A) stands reversed. Thus, relevant grounds of the assessee are partly allowed.
Applicability of the provisions of section 40A(3) to the undisclosed expenditure - We examined the list of expenses of ₹ 48,59,292/- and find most of them are paid to local bodies towards PMC taxes and electrical charges etc. Other expenses are found to be below the specified limit of ₹ 10,000/- or ₹ 20,000/-, as the case may be. Accordingly, the arguments of Ld. DR are dismissed on technical grounds.
Allowability of undisclosed expenditure for business purposes - HELD THAT:- As from the list furnished before us that expenditure was incurred on account of PMC taxes, electrical charges, sales promotion, marketing charges etc. All these accounts broadly falls in revenue zone and for the business expenses of the assessee. Infact, the major expenditure of ₹ 2,79,46,095/- was incurred in connection with the purchase of land and there is no dispute about this transaction. The dispute is only on the sum of ₹ 48,59,292/-. In our view, the proviso to section 37(1) of the Act will not come to this picture as no contravention of any law is made out by the AO. Therefore, AO shall note that these expenses are allowable for working out the excess expenditure spent outside the books of account. Therefore, this part of the arguments of Ld. DR stands dismissed.
Benefit of set off of the brought forward losses pertaining to A.Y. 2004-05 against the income of this year - HELD THAT:- Since the direction of the CIT(A) is to allow set off brought forward losses ‘in accordance with law’, no corrigendum is necessary in the matter. When there are no brought forward losses pertaining to A.Y. 2004-05 as on date, question of set off of brought forward loss of that year against the income of A.Y. 2005-06 does not arise as per law and even otherwise such brought forward business loss, if any, cannot be set off against the ‘deemed income’ assessed for A.Y. 2005-06.
Addition on account of entire expenditure incurred on the capital asset - HELD THAT:- No dispute about the sale of shops to Mr. Dheeraj Keshwani for a sum of ₹ 1,99,00,000/- with extra works specified in the sale agreement. Assessee could not complete those works and the same works out to ₹ 56,20,400/-. We find that the said amount has to be borne by the assessee. Since the works are not done by the assessee, the assessee reimbursed the same to Mr. Dheeraj Keshwani. Therefore, assessee claimed the same as Revenue expenditure in his account. However, the same was claimed as Capital expenditure in the revised return of income.
CIT(A) gave a categorical finding in stating that the assessee paid the amount in account payee cheque to Mr. Dheeraj Keshwani and there is no dispute about it. As such, assessee also did not claim the said expenditure as the Revenue expenditure finally. Therefore, in our view, the decision of CIT(A) given in Para No.5.1 of his order above is favour of the Revenue and it does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed.
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2018 (6) TMI 1730
Disallowance of interest payment on belated TDS payment - case of the appellant inter-alia that interest on late payment of TDS is compensatoryand not penal in nature; that TDS is not a liability in the hands of the deductor; that interest paid on account belated TDS payment is only to compensate the loss, if any; etc, and therefore, the same is allowable - HELD THAT:- As decided in Narayani Ispat Pvt. Ltd. [2017 (10) TMI 67 - ITAT KOLKATA] AO has wrongly applied the principle laid down by the Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd [1998 (3) TMI 2 - SUPREME COURT] We also find that the Hon'ble Supreme Court in the case of Lachmandas Mathura [1997 (12) TMI 16 - SUPREME COURT] has allowed the deduction on account of interest on late deposit of sales tax u/s 37(1) of the Act. In view of the above, we conclude that the interest expenses claimed by the assessee on account of delayed deposit of service tax as well as TDS liability are allowable expenses u/s 37(1).
We find that in that case also, the issue involved was regarding allowability of interest on belated payment of service tax and TDS whereas in the present case, the issue in dispute is regarding interest payment on belated payment of TDS. Hence it is seen that the facts and dispute are similar and therefore, by respectfully following this Tribunal order, we decide the issue in favour of the assessee.
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2018 (6) TMI 1729
Deemed income u/s.69/69B - Income disclosed in survey action u/s.133A - taxation for discrepancies in the stock of gold and silver - HELD THAT:- There was survey action on the assessee and the same resulted in the disclosure of additional income of ₹ 1.25 crores on account of excess stock of gold and jewellery. It is also a fact that the assessee reflected the said income in the profit and loss account while filing the return of income. The requisite taxes were also paid on the said income. We find disclosure of said additional income is closely linked to the excess closing stock of assessee and consequently the business nature of the said additional income.
As decided in M/S. SUREKH JEWELLERS [2016 (8) TMI 1140 - ITAT PUNE] additional income disclosed by the assessee in the survey action u/s.133A partakes the character of business and therefore, the assessee is entitled to the benefits of excess remuneration qua the additional income as per the provisions of section 40(b).
The excess stock linked additional income partakes not only the character of business profit but the same is eligible, for quantifying the remuneration u/s.40(b) of the Act. Therefore, we are of the considered view that the order of the CIT(A) needs to be reversed. Consequently, the grounds/additional grounds raised by the assessee are allowed.
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2018 (6) TMI 1728
Valuation - inclusion of development charges i.e. cost of dyes and moulds in the assessable - HELD THAT:- This is second round of litigation before this Tribunal on the issue regarding includibility of the development charges in respect of dies and moulds. It is on record that the mould etc. have not been manufactured by the appellant and has been provided by their client for use in their factory in the manufacture of the excisable goods for them. Therefore, the question of charging duty on the goods which has been capitvely consumed does not arise at all in view of Notification No. 67/1995.
Appeal allowed - decided in favor of appellant.
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2018 (6) TMI 1727
Jurisdiction - it is the submission of the Learned Counsel for the Respondents that the present Appeal filed by the Appellant is an abuse of Process and that the Appellant has no locus to even initiate a complaint under the Companies Act, 1956 - whether High Court could exercise power in respect of a proceeding pending not before it, but, at the Magistrate's Court and the issue before it was not whether the High Court can exercise powers under Section 633(1) of the Companies Act, 1956 to relieve a person on liability in a proceeding pending before it? - HELD THAT:- The object of Section 633 of the Companies Act is to grant relief against undue hardship in a given case and grant relief from liability to a person who though technically guilty of negligence, default, breach of duty, misfeasance or breach of trust, are able to satisfy the subjective conscience of the Court that they had acted honestly and reasonably and having regard to the attendant facts and circumstances of their case they ought to be fairly excused / relieved from the charge or charges levelled against them - One cannot ignore a very vital fact that Section 633(2) of the Companies Act, 1956 confers a larger / wider ambit to the Hon'ble High Court to grant an 'Apprehended' / 'Anticipatory relief' in regard to the Apprehended / Anticipatory criminal proceedings also.
As per Section 633(2) of the Companies Act, 1956 the power to grant relief to the Hon'ble High Court, is a discretionary power and the same should be exercised by the Court only where it is satisfied that the concerned person had acted honestly and reasonably and that considering the circumstances of a given case, he should be excused. The only issue for consideration under Section 633(1) or (2) is that whether a person had acted in good faith [honestly] and whether he had any reason to escape from the liability.
A glimpse of Section 633(1) of the Companies Act, 1956 unerringly points out that in the criminal proceedings, the Court shall have no power to give relieve from any civil liability, which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust - Also, this Court points out that the decisions of various High Court cited on behalf of the Appellant in the present O.S.A. No. 393 of 2013 where the criminal prosecutions were initiated by Registrar of Companies/Statutory Authority after issuance of show cause notices to the concerned person(s) and thereby making them aware / bringing it to their knowledge well in advance about the anticipated / apprehended / prospective/contemplated proceedings - But in the present case on hand, the Appellant is the complainant in C.C. No. 107 of 2013 on the file of trial Court.
There is no Second Opinion of a very significant fact that the power under Section 633(2) of the Companies Act can be exercised by the High Court with great care, caution and circumspection based on the facts and circumstances of the given case, which float on the surface.
Appeal dismissed.
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2018 (6) TMI 1726
Area Based Exemption - Industrial Policy for the North Eastern Region - exemption of excise duty by way of refund - stand of the authorities justifying the refusal to the exemption was that under the notification of 18-7-2009, the benefit is for a period of ten years from the date of the notification and hence, further exemption cannot be given after expiry of the period of ten years from the said notification - HELD THAT:- Under the notification of 8-7-1999, as made applicable to the appellant by the notification of 12-2-2002 upon their location being included, the appellant would be entitled to exemption for a period of ten years from 8-7-1999.
The notifications dated 8-7-1999 and 12-2-2002 have to be interpreted in a manner that once a particular industrial unit is brought within the purview of the notification of 8-7-1999 by including through an amendment made by the notification of 12-2-2002, the exemption benefit provided by the notification of 8-7-1999 would be squarely applicable in respect of such industrial unit. The notification of 8-7-1999 having specifically provided that the exemptions would be available for a period of 10 years w.e.f. the date of the said notification, i.e., 8-7-1999, any industrial unit subsequently brought within the purview of the notification by virtue of any later amendment, would also be entitled to the benefit of exemption from 8-7-1999.
The contention sought to be raised by the respondent authorities that the appellant would be entitled to the benefit of exemption from the date of the notification of 12-2-2002, inasmuch as, only after the said notification the appellant is entitled for an exemption and that such exemption would come to an end on the expiry of 10 (ten) years from the notification of 8-7-1999, would be unacceptable. The said contention would not only be contrary to the provisions of the notifications dated 8-7-1999 and 12-2-2002, but also would amount to giving a constricted interpretation to the provisions of the notifications, which would be impermissible in view of the aforesaid provisions of law.
The appellant would be entitled to the benefit of exemption from excise duties for a period of 10 (ten) years w.e.f. 8-7-1999 - Appeal allowed - decided in favor of appellant.
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2018 (6) TMI 1725
Correct head of income - fixed deposit interest income - Income from Business & Profession or Income from Other Sources - FAA had allowed the claim made by the assessee on the grounds that it was in the business of production of films that the completion of films would take time that during the intervening period the advances were deposited with bank resulting in accrual of interest income - HELD THAT:- We find that these basic finding of the FAA have not been challenged by the Department. It is also a fact that Government of India was 100% shareholder of the assessee-company and the deposit of advances with the banks was directly and inextricably linked with the business of the assessee,so the interest earned by it had to be treated as income earned from business and cannot not be treated as income from other sources - interest earned by the assessee was obviously attributable and incidental to the business carried on by it that it would not be correct to say that this interest was totally de hors the business carried on by it.
Interest can be assessed under the head Income from other sources only if it cannot be brought within one or the other of the specific heads of charge.In the case before us the interest income is clearly and justifiably assessed as business income - case under consideration is not a case of depositing unutilized and surplus money by the assessee to earn interest and therefore the interest earned by the assessee cannot be assessed as Income from other sources.
Thus we hold that the order of the FAA does not suffer from any legal or factual infirmity and that it does not require any interference from our side - Decided against revenue.
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2018 (6) TMI 1724
TDS u/s 195 - disallowance u/s. 40(a)(i) for non-deduction of TDS - payment made by the assessee to a non- resident as agency commission - CIT(A) deleted the addition - HELD THAT:- CIT(A) has rightly deleted the addition in dispute by following the various case laws as well as following the Ld. CIT(A)-XII, New Delhi Order passed in assessment year 2009-10 in assessee’s own case wherein relying WELSPUN CORPORATION LIMITED AND VICE-VERSA [2017 (1) TMI 1084 - ITAT AHMEDABAD] held that on payments made by assessee for services rendered by non-resident agents could not be held to be fees for payment for technical services, these payments were in nature of commission earned from services rendered outside India which had no tax implications in India.
Decision of Hon’ble Madras High Court in the case of CIT vs. Kikani Exports Pvt. Ltd. [2014 (9) TMI 96 - MADRAS HIGH COURT]wherein it was held that the services rendered by the non-resident agent could at best be called as a service for completion of the export commitment and would not fall within the definition of “fees for technical services” and, therefore, section 9 was not applicable and, consequently, section 195 did not come into play. Therefore, the disallowance made by the AO towards export commission paid by the assessee to the non-resident was rightly deleted. - Decided against revenue.
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