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Showing 141 to 160 of 1442 Records
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2014 (2) TMI 1305
Order of provisional attachment - Jurisdiction of judicating Authority, which has subordinate jurisdiction to that of a High Court confirming the order of provisional attachment, especially, when the petitions filed by the appellants-original petitioners were pending before this Court - alternative remedy
- Held that:- Section 35 of the PMLA Act provides the procedures and powers of Appellate Tribunal under the Act. It goes without saying that the Act, itself, is a self-contained Act, and therefore, even after a contention is raised by both learned Sr. Advocates, Mr. Thakore and Mr. Joshi, that the Tribunal shall have no jurisdiction, same does not find favour with us.
Also unable to persuade ourselves to accept the submission made by the learned Sr. Advocates that the Tribunal would not exercise jurisdiction, only because the concerned authority has relied upon a decision of the Andhra Pradesh High Court, which is a subject-matter of appeal before the Hon’ble Apex Court.
Be that as it may, the Act being a complete Code in itself and in view of the fact that we are inclined to dismiss the appeals only on the ground of jurisdiction, the other submissions made and the decisions cited by the learned Counsels for the appellants and the respondents are not delve upon in extenso by us, leaving it open for the parties to raise the same before the appropriate forum in appropriate proceedings. The reason for the same being, this Bench is of the opinion that the learned Single Judge has, after considering the provisions of the Act, has relegated the parties to the most efficacious alternative remedy available to them under the law and we do not think that we would like to interfere with same.
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2014 (2) TMI 1304
Recovery of outstanding dues of the Government of India - Circular dated 1st January, 2013 issued by the Government of India, Department of Revenue, Central Board of Excise and Customs, New Delhi - Held that: - the petitioner having lost before this Court, the Hon’ble Supreme Court having not granted stay pending the appeal, necessary legal consequences would be recovery of the outstanding dues. The power can legitimately be exercised irrespective of the impugned circular - it is incorrect to hold the circular to be arbitrary or discriminatory or violative of any fundamental or statutory right of the petitioner or any other party - petition dismissed - decided against petitioner.
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2014 (2) TMI 1303
CENVAT credit - welding electrodes used in repair and maintenance of capital goods - Held that: - the issue is no more res integra and stands settled by various decisions of High Courts that welding electrodes used for repair and maintenance are admissible Cenvatable goods - reliance placed in the case of AMBUJA CEMENTS EASTERN LTD. Versus COMMISSIONER OF C. EX., RAIPUR [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT] - credit allowed - appeal dismissed - decided against Revenue.
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2014 (2) TMI 1302
Oppression and mismanagement - Closely held company - deemed public company - free transferability of shares - HC [2011 (6) TMI 666 - HIGH COURT OF BOMBAY] as ordered continuing the injunction which was initially granted by the Company Law Board for a period of six weeks - Held that:- Leave granted.
List the matters for final disposal on 9th April, 2014 at 10.30 a.m. as Item No.1.
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2014 (2) TMI 1301
Oppression and mismanagement - Held that:- In the instant case, the Company does not have any commercial activities. It has the immovable properties which are let out to the different tenants. The interest of the complaining members are sufficiently protected by appointment of the special officer/receiver who is directed to collect the rents from the tenants and to keep the same in separate account. It is only the share holding patterns as well as the introduction of the new directors are alleged by the petitioners and the supporting respondents. The main application for oppression and mismanagement is pending and the Court is not denuded of any power to annul all the action which amounts to oppression and mismanagement.
This Court, therefore, does not find that the proceeding under Section 397 & 398 at the time of initiation was validly instituted and assumed the representative character, does not become invalidated because of the reduction of the requisite shares subsequently. Although it is much debated by the warring parties that the issuance of the duplicate shares is clearly impermissible unless it is proved that the original is lost or the duplicate shares and can only be issued to the registered member, this Court feels that the same being the subject matter in the original proceeding and, therefore, is required to be dealt with for the purpose of granting the final relief.
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2014 (2) TMI 1300
Constitutional validity of Orissa Service of Engineers (Validation of Appointment) Act, 2002 - appointment of 881 ad hoc Assistant Engineers belonging to Civil, Mechanical and Electrical Engineering Wings of the State Engineering Service - Held that:- In the case at hand, the State of Orissa had not suffered any adverse judicial pronouncement to necessitate a Validation Act, as has been the position in the generality of the cases dealt with by this Court. The title of the impugned Legislation all the same describes the legislation as a Validation Act. The title of a statute is no doubt an important part of an enactment and can be referred to for determining the general scope of the legislation. But the true nature of any such enactment has always to be determined not on the basis of the label given to it but on the basis of its substance.
The Enactment in the case at hand deals with the law relating to regularisation of incumbents holding public office on ad hoc or temporary basis, much in the same way as regularisation of such temporary appointments is ordered in terms of a scheme for that purpose. The only difference is that while a regularisation scheme can be framed by the Government in exercise of its executive power, the regularisation ordered in the case at hand is by way of a legislation. It is trite that what could be achieved by the Government by exercise of its executive power could certainly be achieved by legislation, as indeed it has been achieved in the case at hand. Question No.1 is answered accordingly.
Regularization of in-service degree holder Junior Engineers who have been working for considerable length of time as Assistant Engineers on ad hoc basis - Held that:- On a true and proper determination of the posts comprising the cadre strength of Assistant Engineers, some more vacancies could fall in the 5% quota proposed to be reserved for the degree holder Junior Engineers and no mandamus could be issued for filing up such vacancies. It is trite that existence of an enforceable right and a corresponding obligation is a condition precedent for the issue of a mandamus. We fail to locate any such right in favour of the writ petitioner degree holders who are still holding posts as Junior Engineers. They will have, therefore, to wait for their turn for promotion against the 33% quota reserved for them along with their diploma holder colleagues. We hardly need to emphasise that those appointed against 5% quota may also have had no such right, but since they have worked in the higher cadre for a long period and discharged duties attached to the posts of Assistant Engineers with the benefits attached thereto, their regularisation comes on a totally different juristic basis than the one sought to be urged on behalf of those who were left out. Appointments as Assistant Engineers were from out of Junior Engineers made strictly according to seniority. The fortuitous circumstance under which the appointments did not extend to the full quota of 5% would make no material difference when it comes to finding out whether the Junior Engineers can claim an enforceable legal right.
Seniority position of those being regularized either under the Validation Act or in terms of the directions being issued by us in these appeals - Held that:- Illegality or constitutional infirmity in the provisions of Section 3(2) or 3(3) of the impugned legislation. Having said so, there is no reason why a similar direction regarding the writ-petitioners degree holder Junior Engineers who have been held by us to be entitled to regularisation on account of their length of service should also not be given a similar benefit. We must mention to the credit of Dr. Dhawan, appearing for the Stipendiary Engineers who have been regularised under the provisions of the Legislation that such Stipendiary-ad hoc Assistant Engineers cannot, according to the learned counsel, have any objection to the degree holder Junior Engineers currently working as Assistant Engineers on ad hoc basis being regularised in service or being given seniority from the date they were first appointed. It was also conceded that Stipendiary Engineers all of whom were appointed after the appointment of the Junior Engineers would enbloc rank junior to such ad hoc Assistant Engineers from out of degree holder Junior Engineers. But all such regularised Assistant Engineers from Stipendiary Stream and from Junior Engineers category would together rank below the promotee Assistant Engineers.
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2014 (2) TMI 1299
Addition of interest as well as brokerage - documents seized from the premises of Mr. Shriram H. Soni - Reopening of assessment - Held that:- Since identity of the assessee was not proved by Mr. Shriram H. Soni at any point of time nor any corroborative evidence was found from the residence of Mr.Shriram H. Soni so as to prove that the assessee is the same person as per the name appearing in the seized document, therefore, in absence of any contrary material brought to our notice, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the addition.
Since we have deleted the addition made by the Assessing Officer and upheld by the CIT(A), therefore, the ground relating to the validity of the re-assessment proceedings u/s.147 and applicability of section 153C become academic in nature and therefore is not being adjudicated. - Decided in favour of assessee.
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2014 (2) TMI 1298
Penalty u/s 271(1)(b) - proof of deliberate defiance on part of the assessee - Held that:- Penal action is not warranted as the present case does not fall in the arena of deliberate and willful defiance by not appearing before the AO on the specific date. A perusal of the record shows that the assessee was given about 10 days to give its explanation. It is also seen that the returned income has been accepted by the AO vide order u/s 153A r.w.s 143(3) and not u/s 144 of the Act.
Nothing has been brought on record to show that the present case is an attempt of deliberate defiance on part of the assessee. Infact the assessment having been completed u/s 143(3) of the Income Tax Act means that subsequent compliance in the assessment proceedings was considered as good compliance. It is further seen that no reasoning has been given by the CIT(A) as to why the following explanation extracted by him in pages 3 & 4 in para 4 of his order cannot be accepted - Decided in favour of assessee.
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2014 (2) TMI 1297
Vladity of reopening of assessment - notice issued u/s 148 having not mentioned the requirement of filing Return and the date within which the Return should be filed - scope of Section 292B - Held that:- The assessee not only responded to the notice under Section 148 within one month, but on the basis of the return filed earlier, participated in the proceedings till the matter reached the FAA and was disposed of.
A glance at Section 292B shows that under this provision, certain Acts are not to be treated as invalid, may be by reason of any mistake, defect or omissions, either in return of income, assessment, notice, summons or other proceedings. A notice cannot be invalidated by reason of any mistake, such as the one occurred in the present case, namely, the period of filing return of income was not specified as contemplated by Section 148 of the Act. If such a defect is not allowed to be cured, or treated as invalid so as to declare the notice invalid, despite the fact that assessee had taken that notice as valid and responded to it in letter and spirit and participated in the proceedings, the very purpose/objective of the provisions contained in Section 292B of the Act would stand frustrated/defeated - Decided in favour of revenue
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2014 (2) TMI 1296
Addition of labour charges and purchases - invoking the provisions of section 145(3) - Held that:- Addition was made by the AO merely on the basis of statement of Mr. Anilkumar Chahwalla who is a proprietor of M/s Padmavati Gems from whom the assessee purchased the goods and M/s Parth Corporation to whom the assessee made the lab our payments. The assessment framed in the case of said person Mr. Anilkumar Chahwalla was a subject matter of appeal before the Ld. CIT(A ), Valsad, vide order dated 27.12.2008, accepted the contention of the said assessee, Mr. Anilkumar Chahwalla. That statement on 24.12.2008 o btained by threatening the assessee of police action and under coercive pressure and the said statement was not given by free will.
Therefore, it was retracted immediately by way of an affidavit dated 27.12.2008 . It is well settled proposition that any statement obtained by coercive measures or under any pressure cannot be admitted as an evidence because it is not by free will. Therefore, the addition made by the AO on the basis of statement of Mr. Anilkumar Chahwalla which was retracted later on was not justified. Moreover the CIT(A) Valsad, while deciding the appeal of Mr. Anilkumar Chahwalla considered the transactions between the assessee and Mr. Anilkumar Chahwalla, proprietor of M/s Padmavati Ge ms and M/s Parth Corporation as genuine. Therefore, the AO is not justified in taking a divergent view. Similarly for the labour charges pa id to M/s Parth Corporation, the assessee furnished before the AO, copy of certificate dated 15.07.2005 issue by ITO Ward-1, Navsari, addressed to assessee, permitting deduction of TDS at a lower rate u/s 197 of the IT Act on the labour charges paid by the assessee to M/s Parth Corporation. Therefore, the transactions relating to the labour charges between the assessee and Mr. Anil Kumar Chahwalla, proprietor of M/s Parth Corporation, cannot be doubted particularly when the quantitative effect of the labour bills was also reflected in the stock register. - Decided against revenue.
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2014 (2) TMI 1295
Revision u/s 263 - Entitlement for claim of deduction u/s 80P - no elaborate discussion in this regard made by AO - Held that:- The circumstances explained by the assessee as well as the order-sheet entry recorded by the Assessing Officer on 19.09.2008 clearly reflects that claim of the assessee for deduction u/s 80P of the Act was very much before the Assessing Officer even before he picked-up the return of income of the assessee for a scrutiny assessment under section 143(3) of the Act. Therefore, the anomaly in the depiction of the claim of deduction under section 80P of the Act on account of a software glitch, as explained by the assessee, is not only plausible but appears to be borne out of record. Having regard to the aforesaid position emerging on a perusal of the assessment records maintained by the Department, we are unable to uphold the assertion of the Commissioner to the effect that the Assessing Officer entertained and allowed the deduction u/s 80P of the Act in the absence of any such claim in the return of income filed by the assessee.
The second point made by the Commissioner that the Assessing Officer did not make any enquiries with regard to entitlement of assessee to the deduction u/s 80P of the Act is also, in our view, not justified having regard to the material on record. In this context, A.Y. 2007-08 we find that in the course of assessment proceedings, assessee gave details of the incomes earned as also the claim of deduction u/s 80P(2)(d) of the Act in its communication which is on record. Evidently, the claim of the assessee was allowed by the Assessing Officer after being satisfied with the explanation of the assessee, though the discussion in the assessment order is quite brief on the aspect. So however, the decision of the Assessing Officer cannot be held to be erroneous simply because in the assessment order he has not made an elaborate discussion in this regard in terms of the parity of reasoning laid down by the Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd.(1993 (4) TMI 55 - BOMBAY High Court) - Decided in favour of assessee
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2014 (2) TMI 1294
CENVAT credit - whether the various iron and steel items used by the respondents in their factory for fabrication of capital goods are cenvatable or not? - Held that: - If the items can be used in the fabrication of capital goods, the benefit of CENVAT credit of duty paid on various iron and steel items would be available to them in terms of the law declared by the Larger Bench decision of the Tribunal in the case of Vandana Global Vs. CCE, Raipur [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - credit allowed - appeal allowed - decided in favor of assessee.
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2014 (2) TMI 1293
Disallowance of Set Off of brought forward Business Loss against the deemed Short Term Capital Gains earned on Sale of Building and Plant & Machinery - Held that:- Assessee’s appeal is squarely covered by the decision of Digital Electronics Ltd. Vs. Addl. CIT [2010 (10) TMI 722 - ITAT, Mumbai] allowing the claim of the assessee for set off of brought forward business losses against short term capital gain as the income earned in the relevant year, although not taxable as 'profits and gains from business or profession' was an income in the nature of income of busiess nevertheless. The assessee was, therefore, indeed justified in claiming set off of business losses against the income of capital gains. - Decided in favour of assessee
Set off of brought forward unabsorbed depreciation against the short term capital gain - Held that:- This issue is also covered in favour of the assessee by the case of General Motors India Pvt. Limited vs. Dy. CIT [2012 (8) TMI 714 - GUJARAT HIGH COURT ] held any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y. 1997-98 upto the A.Y. 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever.- Decided in favour of assessee
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2014 (2) TMI 1292
Issuance of order under section 179 - recovery of arrears of tax from the petitioner being the director of the company - petitioner resigned from the company on 31.5.2000 due to change in the management - Held that:- The petitioner herein was the director of the company which was originally incorporated as Ravit Vinimay with the Registrar of Companies, Gujarat on 19.8.1992. It obtained certificate of commencement of business on 17.9.1992. The company changed its name from Ravit Vinimay to Lanzorate Finance (India) Limited and was registered with Registrar of Companies vide certificate dated 14.12.1995. The petitioner also brought on record a certificate issued by the ROC, being the certificate of incorporation as also the certificate of commencement of business and further changed the name to Lanzorate Finance (India) Limited. It appears that the company thus from the very incorporation was a public limited company and its public issue also were out on 18.6.1996. The petitioner was the promoter/director and continued to be with the company till he resigned from the post on 31.5.2000.
The arrears of tax demand raised on the petitioner in his capacity of Director by issuance of the impugned notice under section 179 is for the assessment year 1996-1997. The provision of section 179 permits recovery of such tax arrears of a company from the director of the company which is a private company or a private limited company. The provision makes it amply clear that when the company is a public company or a public limited company, such provision would not be applicable
Section 179 says where any tax is due from a private company in respect of any income from the said company or any other company in respect of any income of the company of the previous year during which year such company was a private company, if the Revenue is not in a position to recover, every person who was a director of the private company, during such relevant previous year would be jointly and severally liable for the payment of such tax, unless he proves that non recovery could not be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. Subsection (2) of section 179 of the Act also provides the situation that where the private company converted into public company and the tax in respect of private company could not be recovered, nothing contained in subsection (1) would be applicable to any person who was a director of such private company in relation to any tax due in respect of any income of such private company assessable for any assessment year commencing before the 1st day of April, 1962.
The earlier petition preferred before this Court was not entertained on the ground that necessary documents for the Court to arrive at a decision, whether the company was a public limited company or not, were absent. That ipso facto itself cannot be the ground for the concerned authority not to examine the subject matter on merits in the revision petition. Therefore, both, the order under section 179 and the consequential order under section 264 in the revision application, in light of the above discussion, must fail. Petitions are allowed. Impugned orders under section 179 dated 11.1.2005 and under section 264 dated 19.3.2008 are quashed with all consequential proceedings.
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2014 (2) TMI 1291
Revision u/s 263 - issuance of notice under section 263 on the basis of the proposal made by the ITO - Held that:- The present case, it is abundantly clear from para 2 of the impugned order that the ITO, Ward-1(2), Kota vide letter No. 14 dated 01/04/2011 proposed action under section 263 of the Act and it was not the Ld. CIT, who himself called record and examined the same for any proceeding under section 263 of the Act. Therefore, it can be said that the Ld. CIT had not applied his mind but the matter was referred by the Assessing Officer for initiating the proceeding under section 263 of the Act.
In the present case, from para 3 of the impugned order, it is noticed that the notice dated 11/01/2013 under section 263 of the Act was issued only on receipt of the proposal under section 263 of the Act from the ITO, Ward-1(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-1(2), Kota. It is well settled that the Ld. CIT while exercising the revisionary powers under section 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justified. Therefore, before taking any action, Ld. CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under section 263 of the Act, but not of the Ld. CIT. Therefore, issuance of notice under section 263 of the Act on the basis of the proposal made by the ITO was void ab initio. We, therefore, set aside the same. - Decided in favour of assessee
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2014 (2) TMI 1290
Search - Seizure of the documents and records - Mis-declaration - Evasion of the duty - Interest - Penalty - time limitation - Held that: - noticee number 1 while admitting and accepting their duty liability against such clandestine removals of finished goods, noticee number 1 deposited ₹ 30 lakhs through e-payment, they deliberately suppressed material facts relating to clandestine removal of finished goods without accountal and without payment of duty and maintained details relating to such clandestine removals in their private records with intent to evade duty.
That noticee number 1 (applicant) by way of their deliberate acts or omission appears to have wilfully perpetuated fraud and suppressed material facts to gain unlawful monetary benefits by evading Central Excise duty payable to the Government - Hence extended period of limitation appears to be invocable as noticee number 1 (the applicant) had wilfully suppressed the actual quantity of finished excisable goods cleared by them clandestinely in their books of account with intent to evade payment of duty of excise leviable thereon.
The Charge against the co-applicant - At para 10.2 of the show cause notice is that he “definitely’ had prior knowledge relating to such evasion of Central Excise duty by way of clandestine removals, etc., by ‘notice No. 1‘ and that such unlawful act would have never taken place without his consent. .. therefore, appears to have had knowledge or reason to believe that the goods thus removed in contravention of the provisions of law were liable for confiscation…. therefore, appears to have rendered himself liable for penalty in terms of Rule 26 of the said Central Excise Rules, 2002.” The DGCEI submissions on the co-applicant’s application for settlement confirm this allegation.
We agree with the finding that there was clandestine evasion of excise duty and that, therefore, full immunity from penalty cannot be granted to the applicant (Nos. 1 and 2) and also that immunity from prosecution granted to them should be subject to terms and conditions imposed regarding payment of duty, penalty and interest.
The rest of the findings of the learned Member are in consonance with our view that there was clandestine clearance and evasion of duty by the applicant-company, where, the co-applicant has admitted that he looked after the business. Accordingly, we hold that he (the co-applicant) does not deserve full immunity from penalty.
The allegation in the SCN against Shri Prabhu Narayan Singh, Director, is that he had prior knowledge relating to evasion of Excise Duty and such unlawful acts would never have taken place without his consent, these facts are also admitted by him in his voluntary statement. It was, therefore, proposed to impose a penalty under Rule 26 of the Central Excise Rules, 2002, which relates to “any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater - Decided against the assessee.
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2014 (2) TMI 1289
Entitlement to deduction under section 80IB(10) - AO denied claim as the assessee is not the owner of the property and the built up area is more than 1500 sq.ft - Held that:- The provisions nowhere required that developer who are the owner of the land alone would be entitled to grant of deduction under section 80IB(10) of the Act. So far as built up area is concerned, as per section 80IB(10)(14)(a) of the Act, which is very clear that the common areas showed that the residential units alone does not include built up area. In this case, it is very clear that the built up area alone has to be considered to see the threshold limit of 1500 sq.ft. as observed by the ld. CIT(Appeals). See Sanghvi and Doshi Enterprises and others v. ITO [2014 (1) TMI 480 - ITAT CHENNAI] - Decided in favour of assessee
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2014 (2) TMI 1288
Deduction under section 80 HHC computation - reduction of 90% of the gross interest from the profit of the business - Held that:- The issue is now covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. vs. CIT (2012 (2) TMI 101 - SUPREME COURT OF INDIA), wherein it has been held that 90% of not the gross rent or gross interest but only net interest or net rent, which had been included in the profits of the business of the assessee as computed under the head “profit and gain of business or profession” was to be deducted under clause (1) of Explanation (baa) to section 80 HHC of the Income Tax Act,1961 (the Act) for determining the profits of the business. In the said decision the decision of Hon’ble Bombay High Court in the case of CIT vs. Asian Star Company Ltd. [2010 (3) TMI 455 - BOMBAY HIGH COURT ] was impliedly overruled. Accordingly, we restore this matter to the file of AO with a direction to re-compute the deduction under section 80 HHC of the Act on the issue of interest as per aforementioned decision of Hon’ble Supreme Court.
TP adjustment - expenses of advertisement reimbursed by the assessee to its AE - Held that:- The expenses of advertisement reimbursed by the assessee to its AE belongs to the export activity of the assessee. To all the three AEs to whom the assessee has reimbursed advertisement expenditure huge export sales are made. It is the case of the assessee that its operating margin on its export activity is 47.17% as against similar margin of comparables of 8.08%. If the case of the assessee is examine in the light of these facts, then we are of the opinion that Ld. CIT(A) was right in deleting the adjustment as though the transaction of sharing the advertisement expenditure may be an independent transaction but it relates to the activity of export. Even if the total expenditure made by the assessee on sharing of advertisement expenses is reduced from operating margin of exports then also the operating margin of the assessee will be much more than the operating margin of the comparables and operating margin of assessee on export activity has been held to be at arms length by the TPO. It is not the case of TPO that the comparables selected by the assessee were not appropriate or some other comparables were also required to be included. In the light of these facts, we do not find any infirmity in the relief granted by Ld. CIT(A) and we decline to interfere in the deletion of addition.
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2014 (2) TMI 1287
Transfer pricing adjustment - selection of comparable - Held that:- So far as it relates to inclusion of two comparables namely, Santogen Exports Ltd. and Vanasthali Textiles Industries the fact has not been denied that those two comparables were included in the list of comparables during the assessment year 2007-08. It has not been shown that these two comparables were consistent loss making companies. It is the plea of the assessee that comparables should be chosen from the perspective of their functional comparability and as per parameter laid down in Rule 10B(2) of Income Tax Rules, 1962. It was also the submissions of the assessee that these two companies had made profit in the earlier years and have suddenly come into losses in the year under consideration. If it is so, those two concerns cannot be excluded from the list of comparables just for the reason that for the year under consideration these two concerns have incurred losses. Therefore, we se no justifiable reason for exclusion of these comparables.
DEPB should be taken as operating income - Held that:- No error in the order of Ld. CIT(A) vide which it is held that DEPB benefits should be included in operating profit margin. We are aware that Department in its appeal has not agitated such direction of Ld. CIT(A) but as it was argued before us and we uphold the inclusion of DEPB benefit in operating profit margin.
depreciation be treated as operating expenses while computing ALP by TNMM - Held that:- No infirmity in such directions of Ld. CIT(A) as according to well established principle of law while working out profit margin and cost, comparison should be made with like to like and similar to similar. This principle has also been held applicable by the ITAT in assessee’s own case in the aforementioned two orders, where on the basis of similar proposition DEPB benefits have been held to be computed as part of profits while computing margin of the assessee as well as comparables. Accordingly, we decline to interfere in such finding recorded by Ld. CIT(A) and the ground of revenue is dismissed.
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2014 (2) TMI 1286
Justification of referring the matter to the Valuation Officer u/s.55A - Held that:- Reference to the VO can be made only when value adopted by the assessee is less than the Fair Market Value. We find that FAA had held that reference by the AO to the VO was against the provisions of law. If he was of the opinion that reference made by the AO was contrary to the provisions of Act, he should not have referred to the Valuation Report of the VO and should not have adopted Fair Market Value as indicated by the VO. We are not able to endorse his views, therefore, decided in favour of the assessee.
Charging of interest u/s. 234A and 234B - Held that:- We find that assessee had taken specific ground about charging of interest of ₹ 1.54 and 2.54 lacs respectively u/s. 234A and 234B of the Act. We find that while deciding the appeal, FAA has not decided the issue, therefore, in the interest of justice we restore back the issue to the file of the FAA for fresh adjudication. - Decided in favour of the assessee in part.
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9911796707
