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Showing 121 to 140 of 2041 Records
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2017 (9) TMI 1926
Maintainability of petition - Territorial Jurisdiction - Anti-competitive arrangements - cartelisation by action in concert - delaying and denying adequate Point of Interconnections (POIs), even during the test phase/period, thereby attempting and thwarting the RJIL's new project/entry in the telecom market - HELD THAT:- There is no total bar in entertaining such Writ Petition, specifically when the case is made out of great injustice, perversity, illegality, hardship and prejudice to the legal rights of the service providers or the enterprises, apart from non-application of mind to the telecommunication laws. This is specifically keeping in mind the consequences of this opinion, so expressed and the investigation so contemplated followed by the final order of compensation under the Competition Act.
Territorial Jurisdiction - HELD THAT:- There is no issue and/or denial to the facts that the part of cause of action arose in Mumbai and/or the State of Maharashtra. The parties have placed material on record including the affidavits and the averments so made in the Petition, which supports the fact that the part cause of action arose in Maharashtra, including in Mumbai. The relevant averments in this regard of the respective Petitioners, in the Petitions are read and referred by the Senior Counsel - substantial client/consumer base is in State of Maharashtra. The Respondents/service providers Officers' are at Mumbai. The affidavits and averments and the documents so placed on record, show that the various correspondences/the documents have been exchanged by and between the parties, within the jurisdiction of Maharashtra State including Mumbai. Both the parties have substantially argued the matter by referring to the affidavit and the documents/charts, which are necessary to adjudicate the issues so raised. The Senior Counsel appearing for the CCI has not agitated issue about maintainability or entertainability of the Writ Petitions in this Court - the present Writ Petitions, are maintainable and entertainable in this High Court.
Maintainability of Writ Petitions in light of Section 26(1) of Competition Act - HELD THAT:- The impugned order/even if of impugned majority order and/or minority order, no way can be stated to be administrative order/directions and/or not adjudicatory in nature and without any Civil consequences, as submitted by the counsel appearing for the Respondents Jio and CCI. This impugned majority order, in fact, has decided several issues and elements though stated to be in prima facie nature, ultimately entail into the DG to inquire and investigate with clear adverse consequences, so recorded revolving around the Competition Act, by overlooking the provisions of TRAI Act/Contracts, between parties.
Power and jurisdiction under the TRAI Act and the Competition Act - HELD THAT:- The Authorities/Tribunals under the TRAI Act, provide for various measures to facilitate the competition and to promote efficiently in the operation in telecommunication services, including aspects of technical compatibility. All are bound by their respective rights and obligations, arising out of the contracts, they enter into under the prescribed contract terms and under the supervision of the authorities under the TRAI Act. Therefore, if any dispute and/or issue and/or any question of interpretation arises in respect of any terms and conditions and/or policy decision and/or of any rights and obligations of the respective service providers, it is the authorities under the TRAI Act, which is specifically empowered to deal and decide the same - The interest of all the service providers and consumers, is required to be treated equally, fairly, keeping in mind new technology, the supply and the developing telecom market. The Commission independently without keeping in mind the provisions of the TRAI Act in fact by overlooking it, on presumption and assumption, proceeded and initiated the stated inquiry. The scope and power of the Commission to initiate investigation by giving prima facie opinion, inspite of pendency of the issues and existing provisions of telecommunication laws, therefore, is perverse, illegal and impermissible.
TRAI recommendations treated as final - HELD THAT:- The majority decision has wrongly relied upon the recommendations and proceeded upon it. The reliance of recommendation was impermissible to initiate the inquiry. In any way, the impugned order/decision cannot be explained by additional reasons and/or by the oral submission, during the course of the arguments. The market complexity because of lack of clarity revolving around these important issues be left for final decision with the High Court or the Authority under the Telecommunication laws.
Free Subscribers and card holders and the Obligations of other Service Providers - HELD THAT:- The free service, as announced and/or declared by one provider, if has direct communication and or it required to link with the other providers, both the parties are required to act within the framework of agreement, but there is no such agreement and/or clause made out and/or pointed out and certainly not referred in the majority decision. The Commission is required to wait for the decision of the authorities/tribunals based upon the policy and/or circular already declared for the telecom market. The distribution of millions of test cards to the general public though may be a business strategy, but if the issue is raised about its feasibility in the terms of contract and regulation on the date of such action, then there existed a confusion and the clarification as sought by the service providers independently and/or through the Association, in no way can be stated to be action within the purview of Section 3 of the Competition Act.
Telecommunication regulations are binding - HELD THAT:- Admittedly, the concern Respondent launched with 2.2 million subscribers, which was unprecedented, specifically because it offers free services, as a business strategy. Everything is required a pre-contract, pre-notice, specific pre-agreements/clauses and reasonable phase-wise demand in the existing telecom market. The conduct of Respondents was noted in the dissent note, but not in majority decision. Having once offered free services, and even if there are call failures that itself ought not to have been reason to hold that it was only due to deficiency of POIs. The various issues of informants, network and/or operationalization of POIs, non-utilization of POIs and various other technical factors apart from match and/or mismatch of new technology with the existing technology may be the relevant factors. All these aspects unless settled and decided by the Competent Authority/Tribunal under the TRAI Act, the prima facie majority decision is unsustainable and unacceptable even for issuance of any direction - all these disputes where there is delay and denial in providing reasonable POIs; whether there is an obligation to provide one way POI instead of two 2 way POIs; whether there is breach of such obligations; whether the test phase extends only to business partners or employees; whether cards could be supplied for testing quality of network and not for testing the market and; whether this amounts to creation of subscriber base,- all these are issues to be decided by the authorities and tribunals (TDSTD) and not by the High Court and definitely not by the Commission under the Competition Act.
Role of Association (COAI)- "Every majority decision is not cartelisation" - HELD THAT:- No case is made out that the action of the Association was aimed at boycotting the new entrant, or such conduct could be presumed to be anti-competitive. The judgments cited by the RJIL, are of no assistance to accept the case of collusion and/or conspiracy. The failure to provide "unreasonable demands" and/or the "reasonable demands", for want of conditions in the respective licenses (Unified licenses) and the clarification sought, in no way, can be stated to be with intent to stifle the launching by RJIL. Some Petitioners/service providers have shown the charts to demonstrate that from time to time they had supplied the sufficient POIs, keeping in mind the terms of the contract to provide "reasonable POIs on demand" - Merely because the telecom service providers adopted the similar approach to split the trunk groups, that cannot be stated to be a collusive approach and/or treated as an anti competitive agreement. At the appropriate stage, even RJIL has not recorded any objection on the provisions of one way E1S, as reflected from the letters submitted by the RJIL - The Commission (majority) decision, based upon the media report and allegations of RJIL by overlooking the above position cannot fall within the ambit of requisite ingredients of Section 3 of the Act.
No case of tacit agreement or joint decision and/or attempt to hamper the RJIL commercial launching - HELD THAT:- The RJIL conduct and free services, as stated to be a business strategy, was an issue concerning the telecom market itself and therefore, the steps and the representations so made by COAI, in no way can be concluded as a "cartelisation". The Respondent's reproach of interdiction in the stated supply by the Petitioners and its Association is unjust, unreasonable and unsustainable and also premature.
Cartelisation - HELD THAT:- The role of the COAI, of making representations, even for some members but, in view of the uncleared position of the market, cannot be termed as stated "cartelisation". It cannot be treated/read to mean the deliberate, collusive action, only to thwart and/or to scuttle the new entry. The whole action of COIA is bonafide within their power and the authority, in the interest of telecom market and the consumers. The findings, based upon these action of COIA that it breaches the provisions or falls within the ambit of Section 3(2) of the Competition Act, is unjust and untenable.
Show cause notices issued by DG - HELD THAT:- The rights and obligations to provide POIs arise under the terms of the license, granted by the DOT and the terms of supply are governed by the interconnection agreements entered into by service providers with each other. It is relevant to note that the consultation paper of TRAI on these issues, further reiterates the fact of confusion and the controversy so agitated by the service providers and the COAI. Such grievances are genuine and bonafide. Therefore, no case is made out of any cartelisation by and through the COAI.
The Parties material and/or suppression of material facts and/or incorrect information - HELD THAT:- The observation of the Commission that the service providers/Petitioners had an understanding, agreement and acted in concert to deny or delay the provision of POIs, and they as individual members, through their Association have breached the provisions of Section 3(3)(b), ought not to have been opined, even prima facie, unless their respective rights and obligations under the Telecommunication laws are clarified and/or decided by the Regulatory authorities/Tribunal and the High Court. The initiation of enquiry, at this stage, by the Commission by holding that the alleged parallel conduct of individual members and Association establishes prima facie, that there is a collusive conduct that limits provision of services and the technical development as per Section 3(3)(b) is unacceptable, including further action of investigation so ordered, being without jurisdiction, illegal and perverse - It is unacceptable to permit the Commission to collect the facts and/or information when it has not itself concluded the controversy about the rights and obligations of the parties based upon statutory agreements/regulatory authority's guidance/circulars. The stated conduct and/or cartel could not have been tested or inquired into unless their rights and obligations based upon the governing laws in the market are clear and settled, as the same binds all the respective service providers of the telecom sectors.
Petitions allowed.
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2017 (9) TMI 1925
Search proceedings - cash available with the assessee and sale proceeds from jewellery - second round of litigation before this Tribunal - Second round of litigation before this Tribunal - in the first round of litigation, this Tribunal directed the Assessing Officer to examine the search documents and find out the cash available with the assessee and sale proceeds from jewellery and thereafter find out whether the sale proceeds have been used for acquisition of any other asset. If it is not found, then corresponding credit should be given towards unaccounted money lending business - On appeal by the assessee, the CIT(Appeals) deleted the addition made by the Assessing Officer - HELD THAT:- It is an admitted fact that no appeal was filed either by the Revenue or by the assessee against this order of the Tribunal. In other words, the order of this Tribunal dated 17.10.2008 has attained finality. Therefore, the Assessing Officer has to examine the search documents and find out whether cash was available with the assessee and sale proceeds of jewellery were used for acquisition of any other asset. If it is not utilised, then corresponding credit should be given to the unaccounted money lending business as directed by this Tribunal. In this case, the Assessing Officer specifically found that there was no evidence for acquisition of other assets by the assessee. Therefore, the CIT(Appeals) has rightly deleted the addition made by the Assessing Officer. Hence, 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 stands dismissed.
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2017 (9) TMI 1924
Unaccounted investment - bogus LTCG on shares transactions - whether shares transactions to be genuine since the same were carried out through banking channel though the same were not executed on the floor of NSE/ISE? - CIT(Appeals) and the Tribunal deleted the additions - HELD THAT:- CIT(Appeals) in his elaborate order considered the nature of transactions and while deleting the addition observed that the assessee had shown the identity of the person from whom the sale consideration was received. He had also proved the genuineness of the transaction by submitting demat statement of the seller, sale invoices of the broker and copy of the bank statement through which the transactions were routed. Interalia, on such grounds the CIT(Appeals) allowed the appeal. The Tribunal additionally relied on similar issues which were decided by the Bombay Tribunal to dismiss the revenue's appeal.
The issue is primarily based on appreciation of facts and materials on record and is purely factual in nature. No question of law arises.
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2017 (9) TMI 1923
Penalty u/s 271(1)(b) - Delay in furnishing required details - as submitted that the assessment was completed u/s 143(3) of the Act which was proof enough that the assessee had duly cooperated during the course of assessment proceedings - HELD THAT:- We find that the instant appeal is squarely covered by the decision of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan trust [2007 (8) TMI 386 - ITAT DELHI-G] - we hold that the imposition of penalty u/s 271(1)(b) of the Act was patently wrong, especially in view of the fact that the impugned assessment order has been passed u/s 143(3). While setting aside the impugned order, we direct the Assessing Officer to delete the penalty. Appeal of the assessee is allowed.
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2017 (9) TMI 1922
Levy of penalty u/s 271(1)(b) - non-compliance of certain notices issued to the assessee by the Assessing Officer from time to time - assessment has been completed u/s 143(3), wherein the revised return filed by the assessee declaring loss has been accepted by the Assessing Officer after calling for various records from the assessee - HELD THAT:- Though there may have been non-compliance on certain dates/notices, but ultimately all the due compliance and replies have been filed by the assessee and had participated in the proceedings through its authorised representatives before the AO. Before the ld. CIT (A), assessee had contended that the time allowed for compliance of notice dated 30/9/2014 was not sufficient and questionnaire also were not specific, therefore, assessee could not make proper compliance. However, later on assessee had filed all the details, which have been duly examined and accepted by the AO.
Penalty under section 271(1)(b) for non-compliance of particular notice is merely technical and venial in nature, and therefore, we do not find that it fit to be case for levy of penalty u/s 271(1)(b). Accordingly, penalty levied by the Assessing Officer and as confirmed by the ld. CIT (A) is deleted. - Appeal of the assessee is allowed.
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2017 (9) TMI 1921
Fraudulent IPO - Restraint orders - interim ex parte orders as restrained 238 and 16 entities respectively from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions - HELD THAT:- Since, the prima facie findings are not observed in the Investigation reports in respect to aforementioned 216 entities at paragraph 4 the directions issued earlier vide interim orders need not be continued and hence need to be revoked
In exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11, 11(4) and 11B thereof, hereby revoke the directions issued vide interim orders qua aforesaid 216 entities with immediate effect.
The revocation of the directions issued vide the interim orders is only in respect of the entities mentioned at paragraph 4 of this order. As regards remaining entities, violations under SEBI Act, PFUTP Regulations, SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 and Securities Contracts (Regulation) Act, 1956 were observed and SEBI shall continue its proceedings against them.
A copy of this Order shall be served on the Stock Exchanges and Depositories, for necessary action.
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2017 (9) TMI 1920
Capital gain computation - JDA agreement - HELD THAT:- There is no dispute that as per JDA entered into between the assessee company and Shri Ramesh, Ramesh was required to bear the expenditure incurred to make the schedule land usable for development and even if such expenses is paid by the other party, the same is to be debited to his account.
In view of this clear understanding as per JDA, it cannot be accepted that this expenditure of ₹ 65 lakhs is because of business exigency because whatever may be the dispute between Shri Ramesh and his sister, it was to be settled by Shri Ramesh at his own cost and such expenses is not required to be borne by the assessee company.
We are of the considered opinion that the order of CIT(A) is not sustainable because these paras of JDA were not considered by CIT(A) at all. Regarding various judgments cited by ld. AR of assessee, we would like to observe that in view of this fact that the assessee had not been able to establish that the payment in question was on account of business exigency and it was required to be borne by the assessee company and not by Shri Ramesh, none of the judgments cited by ld. AR of assessee is relevant in the present case of the assessee. We therefore reverse the order of CIT(A) and restore that of AO - Appeal filed by the revenue is allowed.
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2017 (9) TMI 1919
Estimation of income - bogus purchases - CIT-A estimating 12.5% as profit element on the alleged bogus purchase - HELD THAT:- It is the averments of the Revenue that the assessee has purchased material from grey market in cash while bills are organized from these bogus hawala dealers. No such details of grey material suppliers are brought on record from whom the assessee has allegedly purchased material in cash and also no trail of money to evidence flow of cash is brought on record by authorities below and these are all in the realm of suspicion which is not permissible.
The assessee had sought cross examination of these hawala parties who have given incriminating statements before Maharashtra VAT authorities but the cross examination was not granted to the assessee by the A.O./CIT(A). The assessee has discharged its primary burden by bringing on record all details w.r.t. purchase and utilization/consumption of material covered under these purchases and there is no adverse comments of the authorities below as to the same and the assessee is sought to be prejudiced by Revenue solely based on statement of third parties i.e. selling dealers which incriminating statement was recorded by Maharashtra VAT authorities at the back of the assessee , while no statement has been recorded by the Revenue nor any enquiry whatsoever u/s 133(6)/131 was conducted by Revenue itself, under these factual matrix of the case , the right of cross examination of the assessee has become absolute and no prejudice can be done to the assessee in these circumstances till the said parties are offered by Revenue for cross examination before the assessee, which despite specifically being asked by the assessee, the Revenue did not allow assessee to cross examine these hawala parties. Under these circumstances keeping in view entire factual matrix of the case, in our considered view, the additions as were upheld by learned CIT(A) cannot be sustained in the eyes of law and is hereby ordered to be deleted - Decided in favour of assessee.
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2017 (9) TMI 1918
Dishonor of Cheque - statutory notice allegedly served upon the appellant was not even placed on record - acquittal of accused or not - HELD THAT:- The service of the statutory notice calling upon the drawer of the cheque (after it has been disowned) to pay the amount of cheque is a necessary pre-condition for filing of the complaint under Section 138 of the Act. Therefore, it was incumbent upon the respondent to produce the said statutory notice on record to prove the same as well. In this case, this document was not even filed by the respondent along with the complaint, and the question of proving the same was, therefore, a far cry. In a case like this, we fail to understand as to how the aforesaid omission on the part of the respondent in not prosecuting the complaint properly could be ignored and another chance could have been given to the respondent to prove the case by producing further evidence. It clearly amount to giving an opportunity to the respondent to fill up the lacuna.
Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1917
Deemed notional rental income from properties owned - Income from house property - HELD THAT:- As found from record that Flat No.16 and 18 at Kalpana, Marine drive were duplex flats used by the assessee. Also found that flat no.16 and flat no.18 on 5th and 6th floor respectively having common staircase attached to both the floors inside the said premises and hence, it can be considered as one house which is adjacent to each other. Accordingly, direct the AO to delete addition made in respect of Flat No.18 for the A.Y.2006-07 to 2009 - From A.Y.2010-11, the assessee has taken Flat No. 8 & 9 at Kalpana, Marine drive as SOP, therefore, there is no reason to disturb the notional value taken by the AO for Flat No. 16 & 18 at Kalpana, while making addition u/s.22 of the IT Act.
Flat No.1, Joothica Co-operative Housing Society Ltd., 22, Naushir Bharucha Road, Mumbai – 400 007 was claimed to be not in a habitable state and therefore it did not have a ready marketable value. In the interest of justice, I restore this issue to the file of AO for verifying factual position and to decide the same afresh as per law.
In respect of Flat No.402, West Wind, Plot No.170/1, Gandhi Gram Road, Juhu, Mumbai – 400 049, we do not find any infirmity in the order of lower authorities, accordingly, we confirm the addition made by AO u/s.22.
Appeals of the assessee are allowed in part in terms indicated
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2017 (9) TMI 1916
Estimation of income - bogus purchases - CIT(A) reduced it to 25% - HELD THAT:- In this case the sales have not been doubted it is settled law that when sales are not doubted, 100% disallowance for bogus purchase cannot be done. This proposition is supported from Hon’ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises [2013 (1) TMI 88 - BOMBAY HIGH COURT] - However, the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee selling on account of non-payment of tax and others at the expense of the exchequer. In such situation in considered opinion on the facts and circumstances of the case the 12.5% disallowance out of the bogus purchases meets the end of justice.
This is following the decision of Hon’ble Gujarat High Court in the case of Simit P Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] followed by the ITAT Mumbai Benches in a number of cases. We order of learned CIT(A) and direct that the disallowance be limited to 12.5% of the bogus purchase. Appeal filed by the assessee is partly allowed.
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2017 (9) TMI 1915
Addition u/s 68 - cash deposits in bank account as undisclosed income - CIT- A confirmed addition - submission of assessee that the said amount represented sale consideration received by assessee for sale of land - assessee has submitted that the ld. CIT (A) has decided the appeal of the assessee ex parte without affording proper opportunity of hearing to the assessee - HELD THAT:- In the interest of natural justice, we set aside the order of the ld. CIT (A). The matter is restored back to ld. CIT (A) for deciding the same on merits, after affording opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes
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2017 (9) TMI 1914
Unexplained cash credit u/s 68 - treatment to migrants from Pakistan - assessee had made cash deposit in eight bank accounts, of which five were current accounts - assessee explained that she had migrated from Pakistan on 30.07.2009 with a view to permanently settle in India and while coming to India, she had brought ₹ 2.71 crores in cash and 1387.50 grm. of gold ornaments and jewellery - CIT- A deleted the addition - revenue argued that assessee had filed declaration with ITO, Mumbai regarding cash brought into India and deposited in various bank accounts in Aurangabad, knowing fully the fact that the jurisdiction of the case over the assessee was not in Mumbai, but was in Aurangabad - Revenue aggrieved by the observations of CIT(A) in treating it as mere venial breach as against the jurisdictional issue in law
HELD THAT:- Assessee had opened bank accounts in Aurangabad. It may be clarified herein itself that the said ITO had accepted the declaration in line with the Circular and had issued certificate to the assessee both for cash and the jewellery declared.
Whether the declaration so made before the ITO, Mumbai affects his jurisdiction and such declaration cannot be accepted? - As coming to the Circular issued in 1969, wherein it is clearly provided that Indians migrating from Pakistan were not required to produce documentary evidence in support of their claim for transfer of money and personal jewellery but had to prove the resources in Pakistan to which such money or jewellery could be reasonably attributed.
We find merit in the order of CIT(A) in this regard in holding that the Income Tax Officer at Mumbai is a functionary of the Income Tax Department. We hold that he is competent to receive the said declaration and to issue certificate in this regard. Even if there is default in filing the said declaration before the ITO in Mumbai but the default is of venial breach in nature and does not affect the declaration so made by the assessee and the subsequent order passed by the ITO, Mumbai - vide said certificate after having considered all the facts of the case and on going through the documents produced, stated that the declaration made by the above person is accepted. In the said certificate, the Assessing Officer referred to the CBDT Circular dated 03.02.1969 and also noted that the lady was Hindu of Indian origin and was residing in Pakistan. Further, she came to settle permanently in India and she brought in sum of ₹ 2.71 crores in cash and gold ornaments & jewellery weighing 1387.50 grms. In support thereof, she produced the passport, Visa and RP number.
AO not accepting the declaration made by the assessee on the ground that the assessee did not prove that it had transferred the assets which it claims to have sold by her and her husband - CIT(A) has not only considered the said evidence filed by the assessee but had forwarded the same to the Assessing Officer, who has not offered any comments in this regard. The CIT(A) vide paras 13, 14 and 15 had elaborately discussed the transactions entered into by the assessee vis-à-vis sale of her gas stations and gas stations sold by her husband, wherein both the assessee and her husband had 40% share each. The assessee had claimed that it had received ₹ 2 crores being her share in the said gas station and her husband had received ₹ 1.50 crores being 40% share in sale of said gas station. Vide para 15, the CIT(A) has further relied on the documentation of sale of property for ₹ 1.10 crores by the husband of assessee. In respect of all these transactions, the CIT(A) had also taken note of mutations in the name of purchasers as per registered sale deeds.
As supporting evidence available with the assessee, the assessee having established its case of availability of cash in its hands, which in turn, was withdrawn by way of cash withdrawal, it cannot be said that the assessee did not have resources of cash, which she had brought into India. In view thereof, we find no merit in the findings of Assessing Officer in this regard and hold that where the assessee has successfully established the resources in her hand, then the plea of assessee of having brought into India of ₹ 2.70 crores cannot be brushed aside.
Bringing huge cash to India in the absence of any banking channels where the assessee has failed to produce any evidence - It may also be pointed out that the bank statement of the bank account held by the assessee in Pakistan clearly shows a credit in her name of ₹ 4.38 crores, which is the evidence of resources held by the assessee and the same cannot be brushed aside. The manner in which the money was transferred and brought into India cannot be looked into by the Assessing Officer, in view of clear-cut guidelines issued by the CBDT and once the assessee is holding requisite amount of cash balance in her bank account, out of which the assessee claims that she had brought the money into India in cash, then the availability of such cash stands explained and does not warrant any addition under section 68
Whether the said amount has been brought into by hawala transaction or hawala means or not? - Admittedly, the transactions through hawala are not to be accepted as such but in the absence of any direct banking facilities between India and Pakistan, modes other than the banking channels are used for the transfer of funds by the migrants from Pakistan to India. The assessee had sought her migration to India because of compelling circumstances, where she has migrated along with her five children. The learned Authorized Representative for the assessee clarified that the husband of assessee is still in Pakistan but on her migration for her settlement, she brought the said cash through unauthorized channels; but in the absence of banking channels between Pakistan and India, the assessee was forced to do so. The Circular issued by CBDT in this regard and the Reserve Bank of India in its letter to the Asst. Director (FERA) had insisted upon a lenient and liberal view in such circumstances in respect of such monies brought into India.
The Hon’ble High Court of Madras in S.R. Lakshmanan Vs. CIT [1990 (2) TMI 21 - MADRAS HIGH COURT]had held that if resources were established to have been available in Sri Lanka, then the manner in which those resources were repatriated to India, though not recognized as one, would not be questioned, but would be accepted
As assessee placed on record certain material from the web in respect of lack of direct banking facilities between India and Pakistan. In another report dated 20.09.2016, wherein it is mentioned that trade between India and Pakistan had increased but there was lack of direct banking channels, limited connectivity and hence, the same was affecting the trade. Accordingly, we uphold the order of CIT(A) in deleting the addition made under section 68 of the Act.
Revenue pointed out that in case the assets were sold in Pakistan and whether the assessee had paid taxes on the said income as she was resident in India. The learned Authorized Representative for the assessee has fairly pointed out that the assessee is resident in India but in the year under consideration is not ordinary resident and as per proviso to section 5 of the Act, only income arising in India is taxable in the hands of such non-ordinary resident persons. We find merit in the plea of assessee.
Theory of probability - AO has accepted the declaration of jewellery and has not made any addition in this regard. The said jewellery was also brought by the assessee on her migration from Pakistan to India and was declared in the same declaration before the same ITO, Mumbai. No adverse comments have been raised in respect of said jewellery declaration nor the same has been added as income of the assessee, consequently, the declaration of cash made by the assessee in the same declaration merits to be accepted. We find no merit in the plea of learned Departmental Representative for the Revenue that no extra corroborative evidence has been brought on record. The assessee has very clearly establishes its case of having transferred the properties in the name of persons to whom it claims to have sold the same and it cannot be the case of Revenue that the said transfers in the name of purchasers was made without taking consideration due for the said transfers. We find no merit in the plea of learned Departmental Representative for the Revenue in this regard and dismiss the same. We uphold the order of CIT(A) in deleting the aforesaid addition under section 68 - Decided in favour of assessee.
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2017 (9) TMI 1913
Transfer pricing addition - international transaction of ‘Provision of IT enabled services’ with transacted value - Comparable selection - application of the TNMM as the most appropriate method or the assessee’s own computation of PLI - HELD THAT:- It can be seen from the Annual Report of this company, a copy of which has been placed in the paper book, that it paid Outsourcing charges to the tune of ₹ 8 crore and odd in addition to payment of Salary and wages etc. to its staff, including director’s remuneration, to the tune of ₹ 24.54 crore. This divulges that roughly 26% of the activity carried out by this company has been outsourced.
As against this, the assessee is doing the entire business at its own without there being any expenditure on outsourcing. This reveals a significant difference in the business model adopted by the assessee and e-Clerx Services Ltd.
In Rampgreen Solutions Pvt. Ltd. vs. CIT [2015 (8) TMI 931 - DELHI HIGH COURT] excluded Vishal Information Technology Ltd. from the list of comparables on accounts of its different business model, namely, more of outsourcing than in-house services. When we advert to the facts of the instant case, we find that e-Clerx Services Ltd. has also spent more than 26% of the total cost of the employees and job work charges simply on outsourcing. Since the business model of e-Clerx Services Pvt. Ltd. is significantly different from that of the assessee, which is not outsourcing any of its work, the same, in our considered opinion, renders it non-comparable. We, therefore, direct to exclude this company from the final set of comparables.
We set aside the impugned order on the issue of addition towards transfer pricing adjustment in the international transaction of ‘Provision of IT enabled services’ and remit the matter to the file of AO/TPO for fresh determination of its ALP. Appeal is allowed for statistical purposes.
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2017 (9) TMI 1912
Allowability of depreciation on toll road - ownership - When a person like the Assessee who is in the business of infrastructure development in execution of such agreement constructs a road and on Build, Operate and Transfer (BOT) basis on the land owned by the Government, can it claim depreciation on the toll road - HC held Merely, because the road is laid out does not mean that the Assessee is the owner thereof. He has laid it out for the purpose of the union and for its ultimate vesting in the public - HELD THAT:- In all the matters numbered above, service is complete. Ld. Counsel for the parties have failed to file the statement of case within the statutory period. Filing of Statement of Case is not mandatory as per amended Supreme Court Rules, 2013. Viewed thus, the matters shall be processed for listing before the Hon'ble Court under the rules.
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2017 (9) TMI 1911
Filter Cake emanated from the affluent plant - excisability / marketability - it was held by CESTAT that goods not excisable - HELD THAT:- There are no merit in the present appeals. Admission refused. The civil appeals are, accordingly, dismissed.
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2017 (9) TMI 1910
Entitlement to deduction u/s. 80P(2)(a)(i) on jewel loans extended to members - claim for deduction on interest income on jewel loans - HELD THAT:- The assessee, in the garb of claiming deduction u/s. 80P(2)(a)(i), is seeking deduction qua other, non-eligible income, since already assessed and brought to tax. True, the AO has, while giving appeal affect, apportioned the general expenses on only interest income under reference, i.e., on jewel and other loans falling u/s. 80P(2)(a)(i). That, however, would make no difference to the net assessable (or total) income under the Act as interest income on the other (marketing) division has already been allowed deduction u/s. 80P(2)(a)(iii) on gross income basis. In fact, this is itself debatable as the said interest (for marketing the products) would equally be deductible u/s. 80P(2)(a)(i) – which he allows for the first time, as the provision makes no distinction with reference to the purpose for which the loan/credit is extended by a cooperative society to its member. We observe no infirmity, both in principle and in effect, in the AO’s working for the two years under reference.
AO, in the first instance, had rejected the assessee’s claim for deduction u/s. 80P(2)(a)(i) at the threshold, i.e., on the ground of it being ineligible. That is, regarded it as not qualifying for deduction. The question of the quantum of deduction or its determination did not arise for consideration. The claim being held valid, he has allowed the same on the basis of the underlying facts and figures. It is only at this stage that he was called upon to, and has, accordingly, allowed deduction, which is to be at the correct amount.
We have examined the algorithm of the assessee’s working to find it to be in accordance with the fundamental principle of only the net income being assessable and, further, of only the relevant income as included in the GTI being eligible for deduction. Merely because the same works to a figure lower than that claimed by the assessee, is, by itself, no ground for regarding the same as erroneous.
The assessee’s working, after all, cannot be considered as sacrosanct. Deduction could only be of the income included in the GTI, so that the assessee’s claim, made on the basis of gross interest income, is without basis in law as well as on facts. This has led to its claim u/s. 80P(1) exceeding the GTI. Further, no infirmity or fallacy in the AO’s working has either been found by us or pointed out by the assessee at any stage. The AO has not exceeded his jurisdiction.
Why, the Apex Court in The Citizen Co-operative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] also made light of the inclusion of associate members, which aspect/s though cannot be considered in appeal giving effect proceedings or the appellate proceedings arising there-from.
AO’s working is accordingly confirmed. The assessee, as it transpires, by not taking the proportionate expenses into account, is seeking to claim deduction u/s. 80P on other, assessable income. As regards the assessee’s COs, the same were not pressed and, besides, there is no estoppel against law (also refer: C.K.Gangadharan & Anr. v. CIT [2008 (7) TMI 10 - SUPREME COURT]. We, accordingly, have no hesitation in, setting aside the impugned order, restoring that of the AO.
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2017 (9) TMI 1909
Condonation of delay in filing appeal - service and receipt of notice - Time limitation - case of the Revenue is that the order dated 13-9-2013 was dispatched to the appellant through speed post on 1-10-2013 but acknowledged receipt for the same has not been produced on record - HELD THAT:- The case of the appellant is that they received the adjudication order only on 4-6-2014 and on receipt of the same, they filed appeal before the Commissioner (Appeals) on 4-8-2014, which is well within the time. Therefore, the appellant prays that the delay is condoned. As the acknowledgment receipt of despatch of adjudication order through speed post is missing, in that circumstance, benefit of doubt goes in favour of the appellant.
Thus, the appellant has filed the appeal before Commissioner (Appeals) within time and if there is any delay, the same is condoned - Considering the fact that Ld. Commissioner (Appeals) has not decided the issue on merits, by setting aside the impugned order, the matter is remanded back to the Ld. Commissioner (Appeals) to decide the issue on merits after affording reasonable opportunity of hearing to the appellant.
Appeal allowed by way of remand.
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2017 (9) TMI 1908
TDS u/s 194A - interest payments made by the bank - no deduction of TDS - As argued no opportunity given for the bank to furnish the acknowledgements in respect of the remaining branches for having furnished before the jurisdictional CIT copies of Form No.15G/ 15H - HELD THAT:- In the case of hand it is not clear from the record as to how many cases of payment of interest the assessee was having Form No.15G/15H and whether these Forms were at all submitted with the jurisdictional CIT. In this factual matrix of the case, as discussed above, we are of the opinion that the impugned orders of the CIT(A) for both asst. years 2011-12 and 201213 rejecting the assessee's claims which are presently before us for consideration, cannot be sustained in view of the observations by the ld CIT(A) of the lacuna and shortcomings of the AO in carrying out proper verification in the TDS made on interest payments.
We, therefore, in the interest of equity and justice, set aside the impugned orders of the ld CIT(A) for asst. years 2011-12 and 2012-13 and restore the matter to the file of the AO for denovo adjudication of this matter, with the directions to verify the assessee's TDS liability branch wise and deductee wise details of interest payments on the point of availability of Form No.15G/15H only in respect of cases when such Forms were before the respective CIT even though belatedly. The assessee will get the benefit of availability of Form No.15G/15H only in respect of cases where such Forms are available with the assessee and submitted with the jurisdictional CIT concerned. - Appeal of the assessee stands allowed for statistical purposes.
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2017 (9) TMI 1907
Maintainability of petition - initiation of CIRP - institution of suits or continuation of pending suits or proceedings - HELD THAT:- The provisions of the Insolvency and Bankruptcy Code, 2016 ('Code') and in particular, s. 14 thereof have been perused. It appears to the Court that s. 238 of the Code is categorical that the Code will apply, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Sec. 14(1)(a) of the Code states, inter alia, that on the 'insolvency commencement date', the adjudicating authority shall by order declare moratorium for prohibiting "the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any Court of law, Tribunal, arbitration panel or other authority" - That the Code will prevail over all other statutes inconsistent therewith has been explained in the recent decision in Innoventive Industries Ltd. vs. ICICI Bank [2017 (9) TMI 58 - SUPREME COURT].
In the instant case, the National Company Law Tribunal (NCLT) (which by virtue of s. 5(1) of the Code is the adjudicating authority] has by its order dt. 18th July 2017 admitted the petition under s. 7 of the Code filed by the SBI against the respondent-assessee and prohibited, inter alia, "the institution of suits or continuation of pending suits or proceedings" against the respondent. This would include the present appeal by the IT Department ('Department') against the order of the Income-tax Appellate Tribunal in respect of the tax liability of the respondent-assessee.
The appeals are disposed of with liberty to the appellant-Department to revive them subject to the further orders of the NCLT.
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