|
Advanced Search Options
Case Laws
Showing 141 to 160 of 1471 Records
-
2022 (1) TMI 1338
TP adjustment - grant of mark-up on recovery transactions - assessee argued before the lower authorities that there was mark-up on these expenses which are incurred at the instance and behest of the AE and expenses by the assessee for administrative convenience are recovered on a cost to cost basis - AR alternatively argued the additional grounds stating that as per OECD guidelines and Indian Transfer Pricing provisions, aggregation of transactions could be made - HELD THAT:- As considering the alternative submissions of the ld. AR, the issue is covered by the Pune Bench of the Tribunal in the case of Cummins India Ltd. [2015 (1) TMI 520 - ITAT PUNE] export value was less and these parties were one of customers and therefore, the risk involved was high. Further, the frequency of such transactions was very low. In view of the above facts and circumstances, the comparison between the export to associated enterprises and export to third parties would not provide accurate results as economic value of the transactions, risk involved were different. We find merit in the plea of the assessee in this regard. We uphold the aggregation of transactions in the TP study carried on by the assessee where the said transactions after benchmark were at arm's length price, no adjustment was to be made. In view thereof, we find no merit in the analysis carried out by the TPO by benchmarking the transactions of exports to third parties with exports to associated enterprises resulting in addition. In view of our discussion herein above, we delete the addition.
Deduction u/s. 10AA - travelling and conveyance expenses and other expenditure incurred in foreign currency from the export turnover while computing the deduction u/s. 10AA of the Act and making a corresponding reduction in the total turnover - HELD THAT:- This issue is covered in favour of the assessee in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] wherein it was held that when object of formula in section 10A for computation of deduction is to arrive at profit from export business, expenses excluded from export turnover have to be excluded from total turnover also; otherwise, any other interpretation makes formula unworkable and absurd and hence, such deduction shall be allowed from total turnover in same proportion as well. Hence this issue is decided in favour of the assessee and against the revenue.
Short grant of MAT credit u/s. 115JAA - HELD THAT:- AO is directed to give appropriate tax credit.
-
2022 (1) TMI 1337
Short Term Capital Gains - premium received by assessee for transferring Redeemable Cumulative Convertible Preference Share and Fully Compulsory Convertible Preference Shares to equity shares during the year - AO allowed the appeal filed by the assessee on this issue and held that the transfer in respect of preference shares is in the hand of the shareholder - HELD THAT:- As in case Anarkali Sarabhai [1982 (6) TMI 50 - GUJARAT HIGH COURT] redemption of preference shares will result in transfer within the meaning of section 2(47) of the Act was held to be in the hands of the shareholder, which in the present case is M/s Satguru Constructions. The Hon’ble Supreme Court in Anarkali Sarabhai [1997 (1) TMI 5 - SUPREME COURT] upheld the aforesaid findings of the Hon’ble Gujarat High Court. Further, the aforesaid decision of the Hon’ble Gujarat High Court was followed in Kartikeya V. Sarabhai [1981 (8) TMI 36 - GUJARAT HIGH COURT] which was affirmed by the Hon’ble Supreme Court in Kartikeya V. Sarabhai vs CIT, [1997 (9) TMI 2 - SUPREME COURT] relied upon by the learned DR.
In the present case, it is to be appreciated that the conversion of preference shares into equity shares is in the hands of the shareholder, i.e. M/s Satguru Constructions. Thus, gain, if any, arising from such a conversion will only be taxable in the hands of the shareholder. Therefore, in view of the above, we find no infirmity in the findings of the learned CIT(A) on this issue. As a result, ground No. 1 raised by the Revenue is dismissed.
-
2022 (1) TMI 1335
Money Laundering - untainted property - proceeds of crime - sin of having recklessly granted housing loans and personal loans to Vijayakumar and others - to be prosecuted under Section 3 read with Section 4 of the PML Act or not? - HELD THAT:- The explanation to Section 3 of the PML Act, cannot have the effect of expanding the horizons of the mother penal provision. The 'explanation' by itself cannot create a new offence. As held by the Supreme Court in Bihar Cooperative Development Cane Marketing Union Ltd. and Another Vs Bank of Bihar and Others [1966 (10) TMI 145 - SUPREME COURT], the explanation must be read as to harmonise with and clear up any ambiguity in the main section and that it should not be so construed as to widen the ambit of the section. The interpretation proffered by the learned Special Public Prosecutors that mere generation and possession of the proceeds of a crime by the commission of a criminal activity, would attract the penal provisions of PML Act, would lead to disastrous results, which we propose to demonstrate with the following illustration. Section 392 IPC-Robbery, is a scheduled offence under the PML Act. A person commits robbery of Rs.1 crore at knife point from the cashier at a bank and decamps with the booty.
The Enforcement Directorate had not registered 2023 ECIRs under the PML Act because, they are aware that mere generation of proceeds of crime via a criminal activity without anything more, cannot attract PML Act. In the above illustration, the robber should have projected the sum of Rs.1 crore, being the proceeds of crime, as untainted property. The Enforcement Directorate cannot be heard to say that every robber would be liable under the PML Act, but, that they would pick and choose only the best amongst them to prosecute under the PML Act. Thus, when a robber cannot be prosecuted under the PML Act for the offence of robbery simpliciter, his accessories like conspirators and abettors, cannot also be prosecuted under the PML Act, in the absence of any material to show that they had projected the fruits of the crime as untainted property.
Chandrasekaran is being prosecuted for the offence under Section 3 read with Section 4 of the PML Act, for having sanctioned the housing loans and personal loans to the co-accused in violation of banking rules. He is now facing seven prosecutions that have been launched against him by the CBI in the Special Court for CBI Cases, for having sanctioned the loans. In the absence of any material to show that Chandrasekaran had directly or indirectly assisted the borrowers in projecting the total loan amount of Rs.19.69 crores (Rs.5.21 crores + Rs.14.48 crores) as untainted property, the impugned complaints against Chandrasekaran under the PML Act are, in our opinion, an abuse of process of law.
Petition allowed.
-
2022 (1) TMI 1334
Levy of penalty under section 114A, Customs Act, 1962 on the appellant, who is not the importer - HELD THAT:- Section 114A ibid deals with imposition of mandatory penalty in certain cases. As per the Customs Act it is the importer who is to file the bill of entry to the proper officer u/s. 46 ibid while importing the goods and the assessment has to be made on that bill of entry and on such assessment, the duty is levied. Thereafter on payment of duty so assessed goods are cleared u/s. 47 ibid. If there is any non-levy or short levy on the goods so cleared then the procedure as contemplated by section 28 ibid is initiated and the competent officer of the department issues notice to the person chargeable with duty or interest requiring him to show cause why he should not pay the amount specified therein. Whereas Section 114A contemplates penalty for shortlevy or non-levy of duty on the person who is liable to pay the duty or interest as determined u/s.28 ibid. The language of the aforesaid section is plain and clear.
From the case records it is clear that no duty or interest has been demanded from the appellant herein nor any duty or interest has been determined against him. It is the settled legal position that it is the importer who is liable to pay the duty not even its director or proprietor as the case may be and this view finds support from the decision of this Tribunal in the matter of NIPPON AUDIOTRONIX LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [2000 (5) TMI 96 - CEGAT, COURT NO. I, NEW DELHI] where it was held that The penalty contemplated by Section 114A can only be on the person liable to pay the duty and not to any other person.
Penalty u/s. 114A is attracted only for the person who is liable to pay duty or interest under section 28 and not on anyone else. Therefore the imposition of penalty on the appellant herein under Section 114A ibid is without authority of law. The appellant could have been held liable for penalty under some other provision of the Act but not under Section 114A as the language of the said section is very clear and unambiguous.
Appeal allowed.
-
2022 (1) TMI 1333
Condonation of delay - Delay of 1084 days in filing the appeals before High Court - HELD THAT:- On perusal of the affidavits filed in support of the condone delay petition we find that sufficient causes have not been shown for not preferring the appeals within the period of limitation. Further we note that decision to file these appeals was taken much after the decision of this Court in PCIT-5 SWATI BAJAJ [2022 (6) TMI 670 - CALCUTTA HIGH COURT] Thus we are not persuaded to exercise any discretion in favour of the appellant/revenue.
-
2022 (1) TMI 1331
Reopening of assessment u/s 147 - addition on account of interest u/s 43D - Assessment reopened beyond the period of 4 years from the end of the relevant assessment year - HELD THAT:- From the material on record, it is clearly indicated that the provision of NPA account was made in accordance with the direction of RBI.
It is settled position of law that the primary duty of the assessee is only to disclose fully and truly all material facts necessary for the purpose of making the assessment and not draw the inferences. Thus, it cannot be said that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of making the assessment. Reliance in this regard can be placed on the decision of Kalpataru Ltd. [2021 (10) TMI 465 - BOMBAY HIGH COURT]
Thus, we are of the considered opinion that there is no satisfaction of the proviso to section 147 of the Act and the Assessing Officer was not entitled to reopen the assessment.
Even otherwise, it is admitted that the basis of reopening the assessment for the assessment years 2010-11 and 2011-12, wherein, similar addition was made by the Assessing Officer which came to be deleted by the Tribunal vide order dated 26.10.2021[2021 (10) TMI 1204 - ITAT PUNE]. Therefore, the very basis of the re-assessment proceedings does not stand, as once the foundation is removed, the superstructure falls (sublato fundmento credit opus). Decided in favour of assessee.
-
2022 (1) TMI 1330
On-money received from its business of real estate development - on-money components on the sale of the bungalows - assessee had received on-money on sale of the property in the course of business and there was nothing to demonstrate any expenditure incurred out of the same by the assessee - Assessee plead restricting the addition to the profit element embedded in the same - HELD THAT:- We therefore agree with the ld.counsel for the assessee that making addition of the entire on-money received by the assessee would not be justified. Though we are of the view that the onus is on the assessee to show what expenses have been incurred by it in cash, which have also remained unexplained, but at the same time noting the fact that bungalows sold by the assessee were not hi-end properties, but small sized bungalows the component of the on-money received on the same @ 50% of the booked price is on a palpably very high side.
We are of the view it would be just and reasonable to restrict the addition to the extent of profit element embedded in this transaction only. The AO is directed to restrict the addition by estimating GP on the on money receipts, at the higher of the rate in this line of business or as agreed to by him before us @ 15% thereof. We may add here that our above decision may not be treated as precedent in any other case having been rendered in the peculiar facts and circumstances of the case demonstrated before us by the ld.counsel for the assessee. Appeals of the assessee are partly allowed.
-
2022 (1) TMI 1329
Principles of natural justice - proceeding against the Appellant on ex-parte basis - completeness of Section 9 application filed by the 2nd Respondent - compliance with the threshold limit or not - existence of pre-existing dispute between the parties or not.
Whether the Adjudicating Authority was right in proceeding against the Appellant on ex-parte basis? - HELD THAT:- The Demand Notice was served on the Corporate Debtor which is evident from proof of delivery and which was not replied by the Corporate Debtor - This Appellate Tribunal also observes that the matter was not disposed ex-parte by the Adjudicating Authority on the first date of hearing itself but after repeated orders finally the matter was disposed as the impugned order 04.08.2021. Hence, this Appellate Tribunal do not find any error in the impugned order on this ground.
Whether Section 9 application filed by the 2nd Respondent was complete in all respect, followed laid down procedures and met the threshold limit? - HELD THAT:- From the record available, it is noticed that the Demand Notice dated 18.07.2020 was sent to the registered office of the Appellant with claim for unpaid Operational Debt of principal amount of Rs. 1,44,63,630/- along with interest from 16.011.2018 to 14.08.2019 of Rs. 26,03,453/- thus, total amount claimed of Rs. 1,70,67,083/-. The date of default was mentioned as 16.11.2018. The Demand Notice also attached various documents including purchase order placed by the Corporate Debtor, invoice raised by the 2nd Respondent/ Operational Creditors, proof of part payment, communication between the parties and the working for computation of the default amount. The Demand Notice was clearly delivered as evident from document of Blue Dart.
Section 8(2) of the I & B Code, 2016 stipulate that the Corporate Debtor shall within a period of 10 days on receipt of the Demand Notice bring to the notice of the Operational Creditor existence of dispute or proof of payment made by sending attested copy of record of electronic transfer of unpaid amount or sending an attested copy of record that Operational Creditor has encashed a cheque issued by the Corporate Debtor - In the present case the Demand Notice was issued on 18.07.2020 and no reply was sent to the Corporate Debtor within 10days of receipt of the Demand Notice i.e. from the dated of 20.07.2020 (date of delivery of demand notice) or even later.
It is therefore clear that the Rules stipulated under Section 8 & Section 9 of the I & B Code, 2016 were strictly followed by the Adjudicating Authority. The total outstanding debt was Rs. 1,70,67,083/- which is more than minimum threshold of Rs. 1 crore - this Appellate Tribunal has no hesitation in holding that the Adjudicating Authority has not erred on this issue.
Whether any dispute was pre-existing which should have been considered by the Adjudicating Authority - HELD THAT:- The fact of pre-existing dispute, if any, are required to be brought to the notice of Operational Creditor within 10 days of the receipt of Demand Notice dated 18.07.2020 which was delivered to the Appellant on 20.07.2020. It is seen that no reply was given to the said Demand Notice and as such no pre-existing dispute was brought to the notice of the Operational Creditor i.e. 1st Respondent herein - Similarly, despite attempting to serve the petition filed under Section of I & B Code, 2016, no one from the Corporate Debtor attended the proceeding before the Adjudicating Authority and as such the Adjudicating Authority was not informed of any pre-existing disputes.
The Adjudicating Authority has correctly observed in the impugned order that in view of the fact that the Corporate Debtor failed to raise any dispute - this Appellate Tribunal does not find any error on this issue in the impugned order.
Appeal dismissed.
-
2022 (1) TMI 1328
Unexplained investment made in the land - seized document itself proves that the assessee had made investment in the purchase of land - CIT-A deleted the addition - HELD THAT:- Cash was received by the assessee from director which would have been utilized for the payment against purchase of land. This presumption also gets strength from the fact that assessee was not having any source of income until July 2013. Further the assessee time and again contended that the cash was paid out of cash received from the directors and directors have offered the cash income in their individual returns.
Therefore considering the fact in totality we are of the view that amount of Rs. 1.98 crore and 1 crore paid in the A.Y. 2012-13 and 2013-14 are made out of the cash received from directors. Hence the source of investment in the hand of the assesse gets explained and no addition can be made in hand of the assessee as it is not the income of the assesse. If at all any addition of cash income is required to be made, that can be made in the individual capacity of the director. Indeed the addition of cash investment has been made in hand of Shri Pravinchandra Patel and therefore, no addition in the present case is warranted. Thus the ground of appeal of the assessee allowed.
Addition being unexplained expenses on basis of seized paper - Whether entire unaccounted receipt should be added or only the profit element after adjusting the expenses against such unaccounted receipt should be added as income in the hands of the assessee? - HELD THAT:- There is no dispute to the fact that the land was acquired by the assessee dated 12th January 2012 and its commercial activities were commenced from July 2013. In other words, there was no activity carried out by the assessee in the year under consideration. Thus the question arises can there be any addition for the unexplained expenditure incurred by the assessee on account of undisclosed income. In the present case, there cannot be any possibility for the assessee for having any unaccounted income in its hands for the year under consideration. It is for the reason that the assessee has not done any commercial activity suggesting that the assessee has earned income which was not disclosed in the books of accounts. If any addition was at all liable to be made, the same could have been done in the hands of the directors of the company. It is for the reason that there were directors who were found to have invested money on behalf of the assessee out of their undisclosed income. Thus, it can be inferred that the directors of the company have incurred the expenses on behalf of the company. As such, the assessee cannot be made subject to addition on account of unexplained expenditure in the year under consideration.
As we have adjudicated the issue raised by the assessee after applying the concept of telescoping, we refrain ourselves from adjudicating the other questions recorded hereinabove for the purpose of the decision. Thus the ground of appeal of the assessee is partly allowed.
Disallowance of the depreciation on account of excess value of the building - statement furnished on oath under section 131 of the Act that the contractor has raised the bills at the higher value and the payment was accordingly made to the contractor at the higher value which was received back in cash by the assessee - HELD THAT:- It seems that the conclusion has been drawn by the revenue solely based on the statement furnished during the assessment proceedings. We find that the CBDT in instruction no 286/2/2003-IT(Inv.II)has instructed the revenue authority to make addition in search proceeding only in the basis of material found instead of mere admission.
Admittedly, the information gathered during the search proceedings can be vital piece of input/material but the same cannot substitute the evidence. It was expected by the revenue to carry out necessary investigation based on the seized document and the statement obtained during the search proceedings to find out the truth after conducting the enquiries from the contractors. But no enquiry from the 3rd party has been conducted by the revenue. Accordingly, we are not inclined to uphold the finding of the authorities below. Thus we set aside the finding of the learned CIT(A) with the direction to the AO to allow the claim of the assessee for the depreciation - Hence the ground of appeal of the assessee is allowed.
Unexplained cash credit u/s 68 - lack of creditworthiness of the parties - HELD THAT:- The assessee has discharged its onus by furnishing the necessary details such as a copy of PAN, bank details, and ITR etc. in support of identity of the parties, genuineness of transaction and creditworthiness of the parties. Admittedly the AO has accepted the identity and genuineness of transaction but doubted the credit worthiness of the parties. However the learned CIT(A) held that the assessee has discharged the primary onus cast under section 68 of the Act and onus shifted on the AO to prove otherwise based on contrary materials on record.
Third condition, i.e. creditworthiness of the parties, regarding this we note that the assessee has refunded the amount through banking channel to all the parties.The repayment of the loan amount by the assessee was duly accepted by the Revenue.
Thus there remains no doubt that the transaction of the advance received by the assessee from the parties was genuine. In our considered view, once the assessee is able to prove that the money received by it was returned in the subsequent assessment year in the account of the party, then there remains no doubt that the advances received by the assessee were unexplained cash credit. Similarly, we also note that the assessee in respect of all the parties out of the parties as discussed above has furnished the sufficient documentary pieces of evidence including the details of the income of the parties. Therefore in our considered view, the assessee has discharged its onus imposed under section 68. - Decided in favour of assessee.
Assessment u/s 153A - disallowance of deduction under Chapter VI-A - Whether no incriminating material was found during search for A.Y,2009-10 and hence the proceeding for A.Y.2009-10 remained unabated? - HELD THAT:-There was no incriminating document found/seized during the search proceedings and therefore the concluded/unabated assessment years cannot be disturbed.
Assessee was the man of means and capable of making the investments. The assessee in support of his contention has also filed the cash flow statement i.e. showing the source of money invested in the impugned property. It was submitted by the assessee that the investment was made out of the drawing from the bank and this contention of the assessee was not controverted by the learned DR appearing for the Revenue at the time of hearing. In view of the above and after considering the facts in totality, we do not find any reason to interfere in the finding of the learned CIT-A and thus we uphold the same. Thus the grounds of appeal of the revenue are dismissed.
Addition u/s 50C - difference in sale consideration and stamp value under section 50C - HELD THAT:- The proceedings before us are special proceeding under section 153A and assessment is also unabated/completed. Therefore, addition can only be restricted to the extent of incriminating material found during search as discussed above. As there was no material found in search suggesting that the assessee has received any amount over and above what have been already disclosed by the assessee in the income tax return, we are also of the view that the AIR information cannot be held as incriminating material as there is no evidence that assessee has received excess sale consideration. Therefore, the addition under section 50C in A.Y. 2012-13 being unabated/completed assessment also cannot be sustained. Thus the grounds of appeal of the Revenue are dismissed.
Unexplained investment was made on substantive basis in the hands of M/s Neotech Education Foundation and protective basis in the hands of directors - HELD THAT:- Once the addition on substantive basis representing the investment in cash by the another director namely Shri Pravin C Patel has been made by us in the AY 2014-15, there cannot be any other addition either in the hands of M/s Neotech Education Foundation or other directors on substantive/protective basis. Payment of ₹ 1 and 1.98 crores represents the application of the income added in the hands of Shri Pravin Patel. As such, the investment of Rs. 1 crores and 1.98 crores has been made out of the addition made in the hands of Shri Pravin Patel for Rs.3,97,37,485/. Thus if any addition is sustained in the hands of any other party, that would lead to the double addition which is not desirable under the provisions of law - Decided in favour of assessee.
Treating the agriculture income as income from other sources - HELD THAT:- Admittedly, if the assessee is showing the agricultural income, then it is the onus upon him to produce the necessary evidences to justify such income. Indeed, the assessee has furnished the certificate from the Gram Panchayat. But to our considered view such certificate cannot replace the primary documents such as the details for the cultivation of the crop, details of the sales and the expenses incurred for the production of the crop. Such certificate is secondary piece of evidence.
Considering the size of the agricultural land and interest of justice and fair play we are of the view that justice will be served to the revenue and the assessee if 50% of the total agriculture income is treated as income from the agricultural activity and the remaining 50% is treated as income from other sources in the given facts and circumstances. Hence the ground of appeal of the assessee is partly allowed.
Unexplained cash credit - HELD THAT:- Assessee failed to discharge the onus imposed upon him under the provisions of section 68 of the Act. Hence, we are not inclined to interfere in the order of learned CIT-A.
Unexplained loans/investments in M/s Neotech Education foundation - HELD THAT:- In the absence of necessary information, we can safely presume that this income was earned by the assessee over the period of time which was invested in M/s Neotech Education Foundation over the period. We are presuming so for the reason that there is no other information available on record except that the cash income was invested in M/s Neotech Education Foundation.
After considering the facts in totality, we direct the AO to allow the adjustments against the addition made by him for the investment in cash in M/s Neotech Education Foundation - The adjustment is subject to verification. Effectively, if the availability of cash is found based on the documentary evidence, there cannot be addition of any income in the hands of the assessee. Hence the ground of appeal of the assessee is partly allowed in terms of the above.
Payment from the unaccounted sources for the purchase of the property along with his wife - share of the assessee was 50% in such investment of land - HELD THAT:- It was the onus upon the revenue to establish based on cogent material that the payment has been made by the assessee from some other sources. But the revenue has not brought anything on record. Moreover, we also note that there is a confirmation from the side of the vendor that he has not received the full payment from the assessee, rather he has accepted to have received postdate cheque for the dispute arose in the impugned land. Confirmation of the vendor cannot be brushed aside until and unless other documentary evidences are brought on record. In view of the above we do not incline to uphold the finding of the authorities below. Accordingly we set aside the order of the learned CIT-A and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
Unexplained investment - AR before us submitted that the payment of Rs.5.11 Lacs was paid to the banking channel and therefore no addition is warranted - HELD THAT:- We note that the assessee failed to provide the details of bank or cheque from where fund was transferred. Indeed, the primary onus lies upon the assessee to produce the necessary evidences in support of amount paid. The assessee was afforded enough opportunities to bring the necessary details on record during the assessment and remand proceedings.Thus, in view of the above we hold that the assessee failed to discharge the onus imposed upon him under the provisions of section 69B of the Act. Hence, we are not inclined to interfere in the order of learned CIT-A., thus the ground of appeal of the assessee is dismissed.
Deposits in the ICICI bank account of the assessee - HELD THAT:- The revenue has not brought anything on record suggesting that the loan party was having any taxable income in India. Thus in the absence of return of income in the given facts and circumstances no adverse inference can be drawn against the assessee. Furthermore, the assessee has produced the bank statement of the party maintained with ICICI bank, Vadodra wherein sufficient balance was available for advancing loan to the assessee. Thus, the identity and the genuineness of transactions viz a viz the creditworthiness is established from the impugned statement. Thus, there cannot be any addition to the total income of the assessee merely on the reasoning that the assessee failed to file the confirmation and the ITR of the loan party.
Deposits in the HDFC Bank account of the assessee - Once the assessee has discharged the onus by furnishing the necessary details then the onus is shifted upon the revenue to reject the submission of the assessee based on the cogent reasons. But we note that the AO failed to exercise the powers conferred under the provisions of section 133(6)/131 of the Act by issuing notices upon the loan parties for taking the confirmation. The learned DR at the time of hearing has also not brought anything on record contrary to the finding of the learned CIT-A. Hence, we do not find any reason to interfere in the finding of the learned CIT-A. Hence the ground of appeal of the Revenue is hereby dismissed.
-
2022 (1) TMI 1327
Disallowance of interest on delayed payment of TDS - assessee has claimed expenses on account of interest on TDS which is not an allowable expense under the provisions of the Income-tax Act, 1961 - HELD THAT:- We may refer to the decision of Lachmandas Mathuradas [1997 (12) TMI 16 - SUPREME COURT] wherein it was held that interest on arrears or on outstanding balance of sales tax is compensatory in nature and would be allowable as deduction in computing profits of a business.
Referring to the same decision, ITAT in the case of Narayani Ispat (P) Ltd. [2017 (10) TMI 67 - ITAT KOLKATA] has held that interest expenses on account of delayed payment of service tax as well as TDS is an allowable expenditure. Similar proposition has been laid down in other case laws that such interest is compensatory in nature and is allowable expenditure. Appeal of the assessee stands allowed.
-
2022 (1) TMI 1326
Area Based Exemption - moulds and tools were used within the factory by the appellant for manufacture of excisable goods for General Motors (India) Private Limited. - exemption under N/N. 67/95-CE - extended period of limitation - HELD THAT:- N/N. 67/95-CE exempts goods including capital goods used for manufacture of excisable food within the factory of production.
Learned Authorized Representative has relied on the decisions in the case of Steel Authority of India Limited [2016 (2) TMI 759 - CESTAT NEW DELHI]. In the said case, the goods, namely, Oxygen was cleared within the factory by the appellant to FSNL which in turn was using the same for non-excisable activity. Since the same was used for non-excisable activity, the benefit of 67/95-CE was denied. In that respect, the decision is not applicable to the present case as in the present case the appellants are manufacturing excisable goods within the factory of production.
As regard, the goods cleared from the factory to the Pune Unit of the appellant, the plea of Revenue neutrality has been raised by the appellant in their appeal memorandum. No evidence found in support of the plea of Revenue neutrality. No data of the Pune Unit has been submitted and how and in what manner the goods have been used in Pune has not been stated. In view of that, there are no merit in the defence of the appellant, in so far as goods cleared from the factory of the appellant is concerned. The demand in respect of these goods cleared from factory to the Pune Unit is confirmed.
Extended period of limitation - HELD THAT:- Notification 67/95-CE is very straight forward and leave no scope for doubt. In these circumstances, the motive of avoiding duty cannot be denied. Thus, the extended period has been rightly invoked in respect of the goods cleared from the factory to the Pune Unit.
The demand of duty and penalty on those goods is upheld - Appeal allowed in part.
-
2022 (1) TMI 1325
NCDEX Trading Loss - Speculation Loss - addition treating the claim of loss of the assessee as speculative loss but allowed to set off against the speculative profits in future as has been done by the AO - HELD THAT:- In this case, it is noted that the AO during the course of assessment proceedings treated the transaction made prior to the notification out of total transaction as speculation by giving prospective effects to the said notification dated 27-11-2013 which has been confirmed by the ld. CIT(A). It is not imperative to repeat the facts as narrated by the ld.CIT(A) in his appellate order but the Bench noted that the issue in question is directly covered by the decision in the case of P.D. Sekharia Trading Company Pvt. Ltd.[2019 (3) TMI 2011 - ITAT AMRITSAR]
Bench has also been apprised that Revenue has not challenged the order of ITAT Amritsar Bench (supra) at higher forum and even no material has been placed on record by the Revenue to counter the said fact. Hence, in view of the above decision of ITAT Amritsar Bench dated 19-03-2019, the Bench does not concur with the findings of the ld. CIT(A) and thus the ground of appeal No. 1 of the assessee is allowed.
Disallowance of total expenses comprising of car expenses, shop expenses, Staff tea expenses and telephone and mobile expenses claimed by the assessee - HELD THAT:- During the course of hearing, the ld.AR of the assessee has not filed any written submission controverting the findings of the ld. CIT(A). Hence, Ground No. 2 of the assessee is dismissed.
-
2022 (1) TMI 1324
Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC) - HELD THAT:- It cannot be said that the Appellant Company is not carrying on any business or operations. Hence, we are of the view that the order passed by the National Company Law Tribunal (New Delhi Bench-V) as well as Registrar of Companies, NCT Delhi & Haryana is not sustainable in law.
The name of the Appellant Company be restored to the Register of Companies subject to the compliances imposed - application allowed.
-
2022 (1) TMI 1323
Approval of Resolution Plan - Whether after approval of the Resolution Plan by Committee of Creditors under Section 30, sub-section (4) and filing an Application before the Adjudicating Authority for its approval, any Settlement Proposal under Section 12A (filed by Ex-Promoter) can be entertained deferring consideration of approval of Resolution Plan by the Adjudicating Authority?
HELD THAT:- In the present case, decision of the CoC to approve the Resolution Plan on 17.01.2020 was taken in its commercial wisdom. Whether the CoC can rescind from its decision and accept Settlement Proposal of Ex-Promoter submitted after two and a half years of approval of Resolution Plan, is a question which has arisen in the present case. The present is not a case where the Adjudicating Authority has interfered with any decision of the CoC.
When the invitation was issued inviting Expression of Interest, it was open for all who were eligible to submit the Resolution Plan under Section 29A. Whether the Promoter, who has now submitted Settlement Proposal was eligible or not under Section 29A, is also a relevant question and after approval of Resolution Plan, these enquiries cannot be entertained and embarked upon to find out the eligibility of the Applicant.
The learned Counsel for the Appellant lastly submitted that no reason has been given by the Adjudicating Authority in rejecting the Application filed by the Appellant for keeping in abeyance the proceedings for approval of Resolution Plan. The Adjudicating Authority being in seize of Application for approval of Resolution Plan, there had to be strong reason to keep the Application in abeyance. The Adjudicating Authority being not satisfied that there is adequate reason to accept the prayer of the Appellant, no error has been committed by the Adjudicating Authority in rejecting the Application.
Appeal dismissed.
-
2022 (1) TMI 1322
Maintainability of appeal before ITAT - low tax effect - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018. Now vide the new Circular no. 17/2019 dt. 08/08/2019 the Tax Effect limit has been enhanced and this new Circular dt. 08/08/2019.
From the contents of the aforesaid Circular it is crystal clear that the anomaly in the earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced.
Now the CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Circular no. 3 / 2018 dt. 11/07/2018 are still intact which is crystal clear from the language of the Circular no. 17/2019 wherein it has been mentioned that there is enhancement of monetary limit and amendment to Circular no. 3 /2018 for reducing the litigation. We therefore are of the confirmed view that the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is Rs. 50 Lacs or less. - Appeal of revenue dismissed.
-
2022 (1) TMI 1320
TP adjustment - assessment on account of notional interest on outstanding payments of receivables from associated enterprises (AE) - HELD THAT:- Sole adjustment proposed by the TPO is with regard to the outstanding receivables on the delayed payment beyond 15 days from its AE holding it to be in the nature of un-secured loan and thereby proposing adjustment of Rs.46,07,661/- for assessment year 2012-13, wherein the AO has taken SBI PLR rate of 12.60%; whereas in assessment year 2013-14 the Assessing Officer has made adjustmen by taking average LIBOR rate plus 400 basis point which was arrived at 4.37% treating it to be separate international transaction. Also an un-disputed fact that before the authorities below the assessee had submitted the working capital adjustment vis-à-vis the comparable companies before the TPO / AO which if factored into then no adjustment on account of receivables form AE is required. This working capital adjustment has not been accepted.
If the working capital adjustment is accepted, then the differential impact of working capital of the Assessee vis-à-vis the comparables stands already factored in the pricing/profitability, which herein this appears to have been done and it has been stated that the working capital adjusted margin of the comparables is around 4% whereas assessee’s margin is around 9% and thus, no further adjustment is required.
Before the AO the assessee has up-dated the comparable companies and has filed the working capital adjustment margin which was in response to the show cause notice. From the perusal of the working it is seen that, in assessment year 2012-13 the working capital adjusted on the comparable company was arrived at 4.50% of net profit operating margin as against the net operating margin earned by the assessee at 9.36% and in the assessment year 2013-14, the working capital adjustment of the comparable companies was arrived at 4.02%, whereas the net operating margin earned by the assessee was at 9% which is much higher than adjusted margin earned by the comparable companies. Though we find that in the assessment year 2011-12 the Tribunal has confirmed the said adjustment due to lack of any such computation filed by the assessee at any stage. However, in this year it is already part of the record.
Therefore, we direct the TPO to examine the working capital adjustment and if the working given by the assessee is found to be correct then in the light of the decision of the Hon’ble jurisdictional High Court in the case of Pr. CIT Vs. Kusum Healthcare Private Limited [2017 (4) TMI 1254 - DELHI HIGH COURT ] no adjustment should be made on the proposed notional interest on the outstanding receivables. With this direction the appeal of the assessee is treated as partly allowed for statistical purposes.
-
2022 (1) TMI 1319
Judgment and order passed by the High Court - Petitioner says he has not been served a copy of affidavit in reply - HELD THAT:- Notwithstanding that considering the petition itself we are not inclined to exercise our jurisdiction under Article 226 of the Constitution of India.
Petition dismissed.
-
2022 (1) TMI 1317
Assessment in the name of company non existent - scheme of amalgamation concluded - HELD THAT:- As assessment order passed by the assessing officer in the name of a non existing company, despite having prior information provided by the assessee and such facts recorded in the draft assessment order as well as the final assessment order, suffers from jurisdictional defect and, therefore, same is set aside. Accordingly, we hold that the assessment order passed by the learned assessing officer is without jurisdiction and hence, quashed.
-
2022 (1) TMI 1316
Addition u/s 56(2)(viib) - difference between the FMV of shares at which shares were allotted by the assessee and FMV determined per share thereby making aggregate addition u/s 56(2)(viib) - Whether FMV of shares for the purpose of section 56(2)(viia) r.w.r. 11UA determined on the basis of ‘Balance-Sheet’ drawn on the date of allotment and audited subsequently, can be accepted? - HELD THAT:- Where the Balance Sheet is not drawn on the date of valuation, the Balance Sheet drawn on a date preceding the date of valuation which has been approved and adopted in the Annual General Meeting of the shareholders should be considered. The definition has two limbs: The first limb applies in a situation where the Balance sheet is drawn on the date of valuation and the second limb of definition applies in a situation where no Balance Sheet is drawn on the date of valuation.
In the instant case undisputedly on the date of allotment of shares i.e. 31.3.2016, a balance-sheet was drawn by the assessee albeit the said balance sheet was unaudited on that date. The FMV of the shares was determined on the basis of said balance-sheet. The said Balance-sheet was subsequently audited by the Auditors of the company and ostensibly, there was no difference in the financials of tentative balance-sheet drawn on 31.03.2016 after audit by the Auditors. Since, the balance sheet was drawn on the date of valuation the case of assessee is covered by first limb of the definition of ‘Balance Sheet’. In so far as the condition that the Balance Sheet should be audited by the Auditor of the company, the said condition is also satisfied as the Balance sheet drawn on 31.3.2016 was subsequently audited with purportedly no change in financials.
We hold that the balance sheet on the basis of which FMV of shares allotted on 31.3.2016 was determined by the assessee falls within the meaning of ‘Balance Sheet’ as envisaged under Rule 11U. Hence, we find no error in the FMV of shares determined by the assessee on the basis of balance sheet drawn on 31.3.2016 - Appeal of the assessee is allowed.
-
2022 (1) TMI 1315
Reopening of assessment u/s 147 - Scope of section u/s 148A - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - identity of Section 148 as prevailing prior to amendment and insertion of section 148A - Covid 19 Effect - Validity of re-assessment notice issued under the erstwhile section147/148 after 1.4.2001 without following the mandate of new section 148A - Scope of Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 - HELD THAT:- In view of the ratio propounded in cases MON MOHAN KOHLI VERSUS ASSISTANT COMMISSIONER OF INCOME TAX & ANR. [2021 (12) TMI 664 - DELHI HIGH COURT] argument of the respondents that the substitution made by the Finance Act, 2021 is not applicable to past Assessment Years, as it is substantial in nature is contradicted by Respondents’ own Circular 549 of 1989 and its own submission that from 1st July, 2021, the substitution made by the Finance Act, 2021 will be applicable.
Revenue cannot rely on Covid-19 for contending that the new provisions Sections 147 to 151 of the Income Tax Act, 1961 should not operate during the period 1st April, 2021 to 30th June, 2021 as Parliament was fully aware of Covid-19 Pandemic when it passed the Finance Act, 2021. Also, the arguments of the respondents qua nonobstante clause in Section 3(1) of the Relaxation Act, ‘legal fiction’ and ‘stop the clock provision’ are contrary to facts and untenable in law.
This Court is of the view that the Executive/Respondents/Revenue cannot use the administrative power to issue Notifications under Section 3(1) of the Relaxation Act, 2020 to undermine the expression of Parliamentary supremacy in the form of an Act of Parliament, namely, the Finance Act, 2021. This Court is also of the opinion that the Executive/Respondents/Revenue cannot frustrate the purpose of substituted statutory provisions, like Sections 147 to 151 of Income Tax Act, 1961 in the present instance, by emptying it of content or impeding or postponing their effectual operation.”
Keeping in view the aforesaid, Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void.
The impugned reassessment notices issued under Section 148 of the Income Tax Act, 1961 are quashed and the present writ petitions are allowed.
............
|
9911796707
