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Showing 121 to 140 of 1739 Records
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2017 (8) TMI 1624
Addition of royalty payable to the State Government being unascertained liability as the same were debited on estimate basis - CIT (A) confirmed the decision of AO by recording similar reasons by holding that no contingent expenditure are allowable even u/s 36(1)(xii) - HELD THAT:- AO has not disputed the genuineness of these expenses and has also not taken care of the fact that the exercise of allowing these expenses is revenue neutral, the addition thereof on account of disallowance is not sustainable in the eyes of law. In these circumstances, we find it necessary to restore the case back to the AO to allow the expenses incurred by the Assessee Board on account of payment of royalty to the State of Arunachal Pradesh and state of Gujarat debited in its profit & loss account after due verification of the letter relied upon by the Assessee Board as well as ld. CIT (A).
Disallowance u/s 14A - rejecting the contentions raised by the assessee that no expenses have been incurred by the assessee to earn the exempt income during the year under assessment - CIT (A) observed that it cannot be ruled out that there is a proximate relationship between office establishment expenditure and interest expenditure to the investment resulting income not chargeable to tax - HELD THAT:- When the assessee has not earned any exempt income during the year under assessment, no disallowance is permissible u/s 14A of the Act. So, in these circumstances, this issue is also set aside to the AO to decide accordingly in view of the decision rendered by Hon’ble Delhi High Court in case titled as Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT] in favour of the assessee.
Disallowance of expenditure u/s 36(1)(xii) - As argued when the Assessee Board has placed on record documents under Rule 46A to prove the justification of the expenses made in normal course of business, the disallowance is not sustainable - HELD THAT:- When the assessee has brought on record documentation to prove the justification of debit of expenses disallowed by the AO as well as by CIT (A), the AO is required to examine and verify these documents before deciding the issue in controversy. So, we remand this issue also to AO to decide after entertaining the documents relied upon by the Assessee Board under Rule 46A of the Rules after providing an opportunity of being heard to the assessee. Consequently, grounds allowed for statistical purposes.
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2017 (8) TMI 1623
Denial of natural justice - violation of Rule 46A(3) of the I.T. Rules, 1962 - CIT-A accepting additional evidence during the course of Appellate Proceedings and directing the AO to delete the addition made on account of bogus purchases - HELD THAT:- Case was selected for scrutiny in CASS and notices u/s 143(2) and 142(1) were duly issued and served on the assessee. In response to the said notices, Shri Rajesh Agarwal, Chartered Accountant & Shri Kamal Sharma, Chartered Accountant from M/s Sara & Associates, Chartered Accountants attended and filed the details called for’. AO has also mentioned at page 12 of the assessment order that the assessee filed confirmations in regular format on 26.03.2013. Thus we find that the documents filed before the Ld. CIT(A) were available to the AO. We find that the Ld. CIT(A) has analysed those documents and arrived at a finding. Therefore, there is no violation of Rule 46A (3) of the I.T. Rules 1962 by the Ld. CIT(A). So We dismiss the 3rd ground of appeal.
Bogus purchases - survey action u/s 133A - AO issued notices u/s 133(6) to 23 parties AND notices issued to 19 parties were returned back by the postal authority and 4 parties, no reply was received by the AO - HELD THAT:- Assessee had submitted complete details of purchases such as ledger account, copy of the concerned parties in books of the assessee along with sample copies of invoices issued by the parties and bank statements in which payments made to the parties are duly reflected - In the case of CIT vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee - We find that the Ld. CIT(A) has rightly estimated and restricted the disallowance.
Allowable expenditure - Penalty as paid to MCGM for breach of contract which is infringement of law - HELD THAT:- The Hon’ble Delhi High Court in CIT vs. Loke Nath & Co (Construction) [1984 (1) TMI 53 - DELHI HIGH COURT] held that the amount paid to Municipality as compensation for condoning deviations of original sanction and accepting revised plan of construction is deductible and it is not a penalty for infraction of law. In CIT vs. Indo Asian Switch-Gears (P.) Ltd. [1996 (8) TMI 104 - PUNJAB AND HARYANA HIGH COURT] held that penalty for late delivery of goods is not on account of infraction of law and thus deductible. Appeal filed by the Revenue is dismissed.
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2017 (8) TMI 1622
Penalty u/s 271AAA - Unexplained investment’ in pawn broking to the share of assessee - assessment order is passed under section 143 read with section 153C - HELD THAT:- We find that the Assessing Officer has issued a notice in respect of impugned assessment under section 153C read with 153A(1)(b) of the Act and the assessment was completed under section 143(3) read with section 153C of the Act and subsequently, penalty is imposed under section 271AAA.
It is very clear that where there is a search has been initiated under section 132, penalty can be imposed under section 271AAA of the Act. In this case, from the paper book filed by the assessee at page No. 62, the Assessing Officer has issued notice to complete assessment of the assessee under section 153C read with 153A(1)(b) and not under section 132 of the Act. Therefore, the initiation of penalty is void abinitio and therefore, the order under section 271AAA has to be quashed. Accordingly, we quash the penalty order passed by the Assessing Officer under section 271AA. Thus, this ground of appeal filed by the assessee is allowed.
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2017 (8) TMI 1621
Unaccounted investment and unaccounted profit out of unaccounted production - variation of consumption of electricity was more than 15% - Rejection of books of accounts - HELD THAT:- In identical issues, wherein the additions made by the AO on estimation basis as discussed above were upheld by the concerned CIT(A), the assessee preferred appeals before this Tribunal and this Tribunal vide its common order dated 14.2.2017, passed in a bunch of about 85 appeals in the case of M/s Modi Oil & General Mill, Mandi Gobindgrh [2017 (2) TMI 1319 - ITAT CHANDIGARH] while observing that consequent to the report of the Committee constituted by the Principal, Commissioner of Income Tax, Patiala some internal guidelines regarding acceptability of variation upto 15% have been issued and further that no additions have been made on similar issue in subsequent years by the AO has remanded the matter to the Assessing officer with a direction to decide the issue afresh in accordance with law in the light of the internal guidelines issued by the Principal, Commissioner of Income Tax, Patiala.
In our view this matter need not to be restored in the present appeals as the Ld. CIT(A) while deciding the above appeals in favour of the assessee has already followed the internal guidelines of the committee constituted by the Principal Commissioner of Income Tax, Patiala.
CIT(A) has accepted the variation of 15% in consumption of electricity per metric ton of finished goods as per the report of the Committee. He has also observed that pursuant to the report of committee, the Assessing officers have also followed this norm while making assessment in similar type of cases and have accepted the book results shown by the assesses. Considering the above facts and circumstances, we do not find any infirmity in the order of the CIT(A) while directing the Assessing officer to accept the books results shown by the assessee for this year also and to delete the additions made by the Assessing officer on account of unaccounted profits / unaccounted investment - Decided against revenue.
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2017 (8) TMI 1620
Disallowance u/s.14A r.w.r 8D of the Rules - HELD THAT:- If the assessee has invested in its sister concerns for strategically reasons from its own interest free capital and reserves, then provisions of Section 14A of the Act will not be applicable, because prima facie Section 14A warrants that the assessee should have incurred some expenditure in relation to the income which does not form part of the total income under the Act.
There will be no overhead cost to the assessee when it decides to invest in its own sister companies for strategic reasons at least in the case of the assessee firm before us. However if the assessee had made such investments out of its interest bearing funds then the interest cost will be directly attributable to such investments and cannot be claimed as deduction from any other activities of the assessee bearing taxable income.
Since the Ld.AR had pointed out to us that the assessee had made the investments in its sister concerns for strategic reasons out of its own interest free funds, we find it appropriate to remit the matter back to the file of Ld.AO for fresh consideration and to pass appropriate order in accordance with law and merit and based on our above mentioned observations. Appeal of the assessee is allowed for statistical purposes.
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2017 (8) TMI 1619
Maintainability of petition - Condonation of delay in filing petition - issuance of duplicate share certificates - illegal appointment of the Respondent No. 3 as Director - illegal allotment of share to Respondent(s) sometime in 2005 and 2006 - issuance of notice of any meetings since 2006 onward, etc.
HELD THAT:- This Court cannot preclude from dealing with the delay and laches on the part of the petitioner. Delay and laches do apply which starts from the date of knowledge. The doctrine of laches is based on equitable consideration and depends on general principle of justice and fair play. There is no presumption that the delay is deliberate. To be the laches delay should be such that it could be said that the petitioner is not entitled to relief on account of gross negligence or inaction or want of bona fide imputable to him or that he has given up(waived) his right by acquiescence or by his conduct or neglect. The petitioner has totally failed to explain his silence and inaction from 1981 till filing of the instant case - Under such situation, even if I calculate as of 2005, the date of appointment of the Respondent No. 3 and 2009 on which date the petitioners' share was shown as 10,000 in the Annual Return, then even the petitioner has failed to surmount the delay of 6 years in bringing his claim.
The case of the petitioner is not maintainable on account of inordinate and unexplained delay and inaction on the part of the petitioner.
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2017 (8) TMI 1618
Demarcation report made by a government agency, in the course of conciliation proceedings between the parties - Sections 75 and 81 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The litmus test for determining whether the matter relates to conciliation proceedings was laid down by an earlier judgment of this Court. In Ruby General Insurance Co. Ltd. vs. Pearey Lal Kumar and Another, [1952 (2) TMI 27 - SUPREME COURT], the question to be decided was as to whether a dispute or difference arose out of a certain insurance policy. This Court laid down that the test for determining whether a dispute or difference arose out of the said policy is whether recourse to the contract, by which the parties are bound, is necessary for the purpose of determining the matter in dispute between them. If it is found that such recourse is necessary, then the matter would certainly fall within the policy. Following this judgment, and applying it to the facts of this case, it is clear that recourse needs to be had to conciliation proceedings as the genesis of this demarcation report is only in conciliation proceedings and not otherwise - This being the case, it is of no matter that the present case does not fall within the four pigeon holes contained in Section 81, as otherwise, if there are insidious encroachments on confidentiality, a free and fair settlement may never be arrived at, thus stultifying the object sought to be achieved by Part III of the 1996 Act.
Appeal allowed.
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2017 (8) TMI 1617
Rectification of mistake - assessee chose not to put up an appearance - assessee despite having been intimated way back about the defect in the ‘Memorandum of appeal’, however failed to rectify the same till date - HELD THAT:- Assessee who had failed to rectify the defect in the ‘Memorandum of appeal’ despite lapse of substantial time period, can safely be held to be not interested in prosecuting his appeal. We are of the considered view that as the assessee had failed to rectify the defect in the ‘Memorandum of appeal’, therefore, the same can safely be characterized as an incomplete and invalid appeal, which thus cannot be proceeded with. We thus in the light of the aforesaid facts dismiss the appeal of the assessee in limine.
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2017 (8) TMI 1616
Disallowance u/s 14A read with rule 8D(iii) - investment in the subsidiary domestic Company - CIT-A deleted the addition - HELD THAT:- Assessee has come up with specific argument that it has not incurred any interest cost for earning exempt income but this plea of the assessee has also been brushed aside by the AO without recording any reason of dis-satisfaction.
When it is admitted fact that the assessee has not incurred any interest expenses during the year under assessment and it was having ample cost free funds to invest in its subsidiaries for commercial expediency, the question of disallowance under Rule 8D does not arise - also not in dispute that the income derived by the assessee company from the investment made in its subsidiary is otherwise taxable. When assessee has not utilized any borrowed fund for investment nor made any interest payment nor earned any dividend, there is no question of making disallowance by the AO u/s 14A read with Rule 8D of the Rules.
CIT (A), by considering all these facts, has rightly deleted the addition.- Decided against Revenue.
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2017 (8) TMI 1615
Addition of Donation and subscription account - HELD THAT:- Assessee had filed the evidence i.e. copy of ledger and evidence of donation and subscription before the AO. The ledger in respect to donation and subscription has been supported by evidence which is found placed. Thus, we find that the assessee had in fact filed the bills of each expenditure before the AO.
We note that the subscription and donation was given by the assessee to various organizations to avoid confrontation and to smooth running of its business and, therefore, the expenses incurred by the assessee on subscription and donation is incidental to assessee’s business and are allowable as business expenditure. This view has been upheld in the case of CIT Vs. Bata India Ltd. [1993 (3) TMI 89 - CALCUTTA HIGH COURT] wherein it has been held that contribution to local puja and festival committees or organizations to avoid confrontation and for smooth running of its business are allowable as business expenditure. Therefore, we allow this ground of appeal of the assessee.
Addition under the head repairs - ad hoc disallowance of 20% taking note of the fact that the expenses were made in cash and there were only internal voucher to support the same and since there is no way to verify the same and there being chances of inflation of the claim of expenses he made the disallowance of 20% of such expenses - HELD THAT:- When all the evidence were filed before the AO and from the bills the addresses of the service providers are available, so, if the AO wanted to verify the veracity of the bills he could have easily verified the veracity of the bills from the service providers. We note that the AO has made the disallowance only on the basis of surmises and conjectures. We note that the assessee maintained books u/s. 44AB of the Act which was duly audited u/s. 44AB of the Act as well as u/s. 227(4) of the Companies Act, 1956.
The assessee had produced the copy of the ledger account and the supporting vouchers and bills before the AO, therefore, the finding of the AO that there was no evidence to support the claim is erroneous and we find that all the evidences were filed before the AO and the ad hoc disallowance was not warranted. In case, the AO had any doubt in respect of any bills, the AO should have verified it from the payees whose addresses are available in the bills/vouchers which were on record.
In such a scenario, without rejecting the books of account, the ad hoc disallowance made is not sustainable in the eyes of law which view the Tribunal has been taking consistently in several decisions. If any specific expenditure is unverifiable or is un-vouched, then such specific expenditure is disallowable. In the present case no specific item has been identified by the AO to make the disallowance, therefore, we are of the view that estimated disallowance as confirmed by the ld. CIT(A) is arbitrary exercise of power and, therefore, unsustainable in the eyes of law and therefore, it stands deleted. - Decided in favour of assessee.
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2017 (8) TMI 1614
Book profit u/s 115JB - Revenue recognition from reimbursement of specified taxes - accounts were prepared as per Part-Il & Part-Ill of Schedule-VI of the Companies Act, 1956? - HELD THAT:- We have gone through the decision in the case of Rain Commodities Ltd. [2010 (7) TMI 794 - ITAT HYDERABAD] which has considered the decision of Hon'ble Supreme Court in the case of Apollo Tyres [2002 (5) TMI 5 - SUPREME COURT] and held that it was open to the AO to see whether the accounts were prepared as per PartIl & Part-Ill of Schedule-6 of the Companies Act, 1956. In this case , it is an admitted fact that assessee's accounts have not been prepared as per the requirements of Part-Il & Part-Ill of Schedule-VI of the Companies Act, 1956, which is reflected in the Auditors statement which is reproduced..
Thus, on such issues, as held by the Special Bench of Hyderabad, it was open to the AO to see whether the accounts were prepared as per Part-Il & Part-Ill of Schedule-VI of the Companies Act, 1956. Since, the AO has found that the assessee did not follow the Accounting Standard properly, it had not recognised the income properly and it had not prepared its financial statements as per Part II and Part III of Schedule VI to the Companies Act, 1956 and made the impugned additions and the assessee has not challenged such findings with relevant material, its pleas are untenable and hence rejected. The income which has to be assessed in a particular year can not be assessed in any other year. Therefore, the impugned items of income are assessable in this assessment year and hence the additions made u/s 115 JB are also confirmed.- Decided in favour of assessee.
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2017 (8) TMI 1613
Disallowance u/s 40(a)(ia) - commission payment - contract between the assessee and the transporters and the bills received from the transporters were forwarded to the principals - whether assessee is under obligation to deduct TDS or not? - HELD THAT:- The case of the assessee is that he is acting on behalf of the principals, once transporters send the bills to the assessee, in turn, the assessee forwarded the same to the principals and the principals deducted TDS and commission payment is paid to the assessee.
CIT(A) after calling all the details and after examining the same, he accepted the submissions made by the assessee and deleted the addition. The Departmental Representative is not able to point out any mistake or error committed by the ld. CIT(A). As gone through the order passed by the ld. CIT(A). CIT(A) after examining each and every detail, passed a detailed order. No infirmity in the order passed by the revenue. Thus, this appeal filed by the revenue is dismissed.
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2017 (8) TMI 1612
Brokerage and commission disallowance - AO made correspondence with the commission agents and required them to furnish name and address of buyers for whom they have executed commissioning work alongwith nature of services rendered and the basis of claim of commission - HELD THAT:- D.R. could not point out any specific error in the findings of the CIT(A) that at times commission agent when approaches the purchasers, he does not identify himself as an agent of the seller and merely identifying himself as representative of the seller, in such circumstances, the buyer cannot be aware that the person who has approached is employee of the seller or agent of the seller.
CIT(A) observed that the commission may be paid to an agent for facilitating the trade even when the orders are directly given to the sellers by the purchasers. Non-service of letters to the buyers or non-compliance of the letters by the buyers does not show that the payment of commission was not genuine when the relative sale was considered genuine. Non-furnishing of the name of the buyers by agent in compliance to the notice does not necessarily mean that the agent is not aware of the buyers.
In no situation commission can be earned by a person like HUF is also not tenable. We find that no material could be brought before us to show that the person to whom commission was paid were accommodation/entry provider and the money which was paid through banking channel to them came back to the assessee. Absence of any specific defect being pointed out in the order of the CIT(A), we find no good reason to interfere with the order of the CIT(A), which is hereby confirmed and the ground of appeal of the revenue is dismissed.
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2017 (8) TMI 1611
Disallowance of expenditure u/s.14A r.w.r. 8D - HELD THAT:- As decided in assessee own case [2012 (3) TMI 486 - ITAT CUTTACK]AO had not recorded his satisfaction regarding not accepting the disallowable expenditure shown by the appellant. The investment in such assets were made by the appellant from its operational surplus and not from loan funds - addition u/s 14A to be deleted.
Interest accrued on term loan availed for captive power plant (CPP) and Ore beneficiation Plant (OBP) - HELD THAT:- D.R. could not controvert the findings of the CIT(A) to the effect that from the details of the capital work in progress of the assessee, it was evident that the same consist of cost of the captive power plant and ore beneficiation plant. The assessee had availed term loan for setting up of the plants and has capitalized the interest pertaining to the term loans for both the plants. The assessee has capitalised as per Accounting Standard of 16 of ICAI. The assessee had submitted details of interest and finance charges incurred by it and the accounts regarding capitalization of the same. Therefore, we find no good reason to interfere with the order of the CIT(A), which is hereby confirmed the ground of appeal is dismissed.
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2017 (8) TMI 1610
Condonation of delay in filing appeal to ITAT - reason for delay in filing the appeal before the Tribunal - delay in filing the appeal by 28 days - sufficient cause for the delay - HELD THAT:- There is absolutely no valid explanation or reason for delay in filing the appeal before the Tribunal. The assessee admittedly did not comply with statutory notices issued to him at assessment stage. Therefore, A.O. in the absence of assessee framed practically ex-parte assessment order. Though assessee appeared before Ld. CIT(A) but he did not substantiate any of the grounds of appeal. No evidences have been filed despite giving sufficient opportunities though Shri Trilok Dhir, C.A. appeared before the Ld. CIT(A). Therefore, it is difficult to believe that he was not knowing as to how the appeal has to be filed before the Tribunal. Further, the conduct of the assessee shows that he has not taken any effective steps either before the A.O. or before the Ld. CIT(A) to substantiate any of the grounds before the authorities below
It is difficult to believe that he was not knowing as to how the appeal has to be filed before the Tribunal. The conduct of the assessee shows that he has not taken any effective steps either before the A.O. or before the CIT(A) to substantiate any of the grounds before the authorities below. The assessee had been negligent from the very beginning of the scrutiny assessment and as such the explanation of assessee cannot be accepted.
Even, it is not disclosed in the application as to who was the Counsel engaged by the Assessee for filing the appeal before the Tribunal and why he was engaged when he was not practicing before the ITAT. The application of assessee for condonation of delay is without disclosing any sufficient cause. It is well settled law that the delay can only be condoned only for sufficient and good reasons supported by cogent and proper evidence.
The explanation of assessee is vague and without any substance. Thus, hold that assessee failed to explain delay in filing the appeal was due to sufficient cause. Therefore, reject the application for condonation of delay and dismiss the appeal of assessee in limine being time barred.
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2017 (8) TMI 1609
Non-admissibility of the additional grounds - Procedure in Appeal u/s 250 - Disallowance u/s 14A r.w.r. 8D - whether the assessee can take an additional ground at appellate stage even when the same has not been raised before the lower authorities? - HELD THAT:- In light of the proposition of law laid down in case of “National Thermal Power Company Ltd. [1996 (12) TMI 7 - SUPREME COURT], “Ahmedabad Electricity Co. Ltd. [1992 (4) TMI 29 - BOMBAY HIGH COURT] and Pruthvi Brokers and Shareholders Pvt. Ltd.” [2012 (7) TMI 158 - BOMBAY HIGH COURT] the additional ground raised by the assessee is admitted and the issue is restored to the file of the AO with a direction to verify the claim of the assessee regarding strategic investments as to whether the same were related to the business activity of the assessee or as part of its business strategy to invest in the shares of its sister/subsidiary companies to have control over them and not for the purpose of deriving tax exempt income and whether the dividend/ tax exempt income was incidental to the above business activity of the assessee and decide the issue a fresh in accordance with law in the light of the available decisions of the higher/highest courts/court. It is also held that it will not be an impediment or reason to deny the claim to the assessee that the assessee itself offered the disallowance in its return of income, if the assessee otherwise is found legally entitled to such a claim.
Disallowance u/s 14A - Non - recording of satisfaction - HELD THAT:- The satisfaction of the AO must be arrived at on an objective basis. In a situation where the accounts of the assessee furnish an objective basis for the AO to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recourse to the method prescribed by the rules. An objective satisfaction contemplates a notice to the assessee, an opportunity to the assessee to place on record all the relevant facts including his accounts and in the event that he comes to the conclusion that he is not satisfied with the claim of the assessee.
As observed above, in the case in hand, the AO has not followed the guidelines of objective satisfaction as laid down in the case of ‘Godrej & Boyce’ [2010 (8) TMI 77 - BOMBAY HIGH COURT] while making the disallowance. He without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A - CIT(A) also ignored the mandate of the provisions of section 14A, while giving part relief to the assessee on a different footing. Since we have already restored the matter to the AO on this issue, we direct that the AO will also look into and consider the above aspects and adjudicate on all alternate contentions also of the assessee on this issue and will comply with the requirements of law, as discussed above, while deciding this issue a fresh.
Bad debts written off - OCDs were part of the investment portfolio of the Predecessor Company - HELD THAT:- Claim of the assessee regarding the aforesaid OCDs claimed as ‘bad debts written off’ is hit by clause (i) of sub section (2) of section 36 of the Act. The aforesaid OCDs have not been taken into account in computing the income of the assessee in any previous year. The said OCDs were part of investment portfolio of JVSL, the status on merger of the said OCDs is required to be given the same treatment in the hands of the successor.
Since the aforesaid OCDs were part of the investments of the predecessor holder and, hence, it cannot be said that the same were business assets of the predecessor holder or that the said OCDs has been taken into account in computing the income of the predecessor holder of any previous year.
It cannot be said that the assessee has acquired any right of the predecessor company to claim deduction on account of bad debts written off in respect of such write off of OCDs, because such rights were not available even to predecessor holder of these OCDs. Nor the said OCDs represents money lent in the ordinary course of business of money lending carried on by the assessee. Admittedly, the assessee was not a NBFC at the time of acquiring the said OCDs, hence, it cannot be said that the OCDs were part of the money lent in the ordinary course of business, though later on the assessee company had offered interest on such OCDs as its business income. The said OCDs neither represent the debt or part thereof which has been taken into account in computing the income of the assessee in any earlier previous year nor the same represents the money lent in the ordinary course of business of money lending carried on by the assessee.
In the case in hand the OCDs were part of the investment portfolio of the Predecessor Company and not business debt. The same, therefore, cannot be held to be debts due in the hands of the successor / assessee. This issue is accordingly decided against the assessee.
Write off of irrecoverable principle amount of overdue debentures was allowable as deduction to the assessee in normal course of business of finance / investment activity - HELD THAT:- Restore this issue to the file of the Assessing officer to consider this contention of the assessee as to whether the amount of said OCDs can be treated as business loss to the assessee being loss of business asset. AO is directed to re-adjudicate this issue after giving proper opportunity to the assessee of hearing and furnish necessary evidence in this regard and then decide the same in accordance with law.
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2017 (8) TMI 1608
Computation of deduction u/s 10B - exclusion of freight and clearing charges from export turnover and total turnover - HELD THAT:- What was included in the export turnover shall also be included in total turnover. The CIT(Appeals) by placing reliance on the decision of this Bench of the Tribunal in ITO v. Sak Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D] has directed the Assessing Officer to recompute the deduction under Section 10B of the Act by reducing the freight and clearing charges and expenses for technical services both from export turnover and total turnover. Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Disallowance of provision for Gratuity - CIT(Appeals) by placing reliance in Section 40A(7)(b) of the Act, allowed the claim of the assessee on the ground that 40A(7)(b) of the Act is a special provision for allowing the Gratuity, therefore, the same overrides Section 43B - HELD THAT:- In Commonwealth Trust (I) Ltd. [2004 (4) TMI 51 - KERALA HIGH COURT] found that both Section 40A(7) and Section 43B of the Act should be construed harmoniously. This Tribunal is of the considered opinion that when Section 40A(7)(b) of the Act provides a special allowance for provision for payment of Gratuity fund, the same has to be given preference. As held by Kerala High Court, a harmonious reading of Section 40A(7)(b) and Section 43B(b) of the Act never intended to take away the benefit conferred under Section 40A(7)(b) of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Sale of API division - slump sale or not? - HELD THAT:- The agreement for sale clearly says that it is a transfer of API division as going concern to Actavis. In the agreement, there was no mention about the values of individual assets - details of plant and machinery were not available on record. When the details of plant and machinery are not available on record, it is not known how the individual assets were valued as claimed by the assessee.
Assessee also could not produce the depreciation schedule for the individual machinery of the API division. The written down value of individual assets were also not furnished. The assets and liabilities of the company as on date of transfer was ₹ 20.26 Crores. The assessee is entitled for depreciation at the rate of 15% on plant and machinery. In view of these factual aspects coupled with the fact that API division was transferred as going concern without valuing the plant and machinery individually, this Tribunal is of the considered opinion that it is a case of slump sale. CIT(Appeals) is not correct in saying that it is not a slump sale.
Deduction u/s 10B - adopting the profits arrived as per the provisions of Section 115JB of the Act and not to adopt the amount computed in the regular method - HELD THAT:- Clause (ii) of Explanation 1 to Section 115JB(2) of the Act clearly says that the amount of income to which provisions of Section 10 of the Act other than clause (38) thereof shall be reduced if such amount is credited to the Profit & Loss account. Therefore, the claim of the assessee that Section 10B of the Act is equal to Section 80HHC of the Act may not be correct. No similar clause as clause (ii) of Explanation to Section 115JB of the Act was brought to the notice of the Tribunal by the assessee. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the issue of deduction under Section 10B of the Act is remitted back to the file of the AO to re-examine the matter afresh.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- AO on one end observed that the assessee has not earned any exempted income. However, the assessee claims that disallowance may be restricted to exempted income to the extent of ₹ 15,08,370/-. Therefore, the facts are not brought on record. Hence, the matter needs to be reexamined by the Assessing Officer. Accordingly, the orders of authorities below are set aside and the disallowance made under Section 14A of the Act is remitted back to the file of AO.
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2017 (8) TMI 1607
Detention of goods - provisional release of detained goods - It was held by High Court that The drawing of a distinction between seizure of imported goods as a result of undervaluation and seizure of imported goods upon misdeclaration cannot per se be said to be irrational. The goods ordered to be released provisionally subject to conditions.
HELD THAT:- Leave granted.
There shall be stay of the operation of the impugned judgment, in the meanwhile.
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2017 (8) TMI 1606
Eligibility for exemption under N/N. 6/2006-CE dated 1.3.2006 (Sl.No.19) - manufacture of bus bodies - buses cleared to M/s. Delhi Metro Railway Corporation (DMRC) - it was held by CESTAT NEW DELHI that buses for passengers cannot be considered as an “equipment” within the scope of Entry No.90 of the above said notification. The appellant’s claim for such exemption is not tenable.
HELD THAT:- There are no merits in the appeal - appeal dismissed.
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2017 (8) TMI 1605
Status of a Secured Creditor in the committee of Creditor - HELD THAT:- A copy of the present application be served to Shri Chopra on behalf of the R.P. Shri Mukesh Mohan. He is at liberty to offer his comments on action impugned in the present application and may file reply by 30th August, 2017 by serving an advance copy thereof to the applicant's counsel - Meanwhile, the applicant in CA provisionally permitted to continue and participate in the COC meetings as a Member of the Committee of Creditors. However, this would be subject to outcome of the present petition.
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