|
Advanced Search Options
Case Laws
Showing 141 to 160 of 1558 Records
-
2017 (2) TMI 1423
Assessment u/s 153A - addition of unaccounted profit unearthed by department from Shree Balaji Mall - HELD THAT:- The assessee has made a disclosure of ₹ 3 crores in reply to question no.10 recorded under section 132(4) of the Act. Out of this ₹ 3n crores, ₹ 2 crores has been offered for taxation in this year. We have been informed that rest of ₹ 1 crore were offered in individual hands.
We have tried our best to persuade both the ld.representatives to show some nexus or reasonable conclusion from all the figures mentioned in these papers. By any scientific means they did not goad adjudicating authority to arrive at a conclusion that unaccounted profits have noticed in these papers. CIT(A) has appreciated these papers and arrived at a conclusion that these are rough work without any clear indication as to what the said numbers really lead to or relates to. On an analysis of complete material including statement of director recorded under section 132(4) and the explanation of the assessee extracted (supra) during the course of assessment proceedings, we are of the view that the ld.CIT(A) has appreciated the facts in right perspective way, and department is unable to goad us to arrive at any other logical conclusion. Therefore, we do not find any merit in this appeal of the Revenue.
Penalty u/s 271AAA - addition made on undisclosed income - amount was declared by the assessee in the statement under section 132(4) - HELD THAT:- No questions were put to the assessee. As far as assessment proceedings is concerned, the AO himself has treated this income of ₹ 2 crores as a business income and given set off against the alleged unaccounted profit computed by him. This action of the AO impliedly demonstrate that manner of earning of such income from development of Balaji Mall has not been doubted. Thus, the assessee has fulfilled all three conditions contemplated in sub-section 2 of section 271AAA and it could not be visited with penalty qua the alleged ₹ 2 crores disclosed during the course of search and offered them for tax in the return filed by the assessee. CIT(A) has rightly deleted the penalty. - Decided in favour of assessee.
-
2017 (2) TMI 1422
Disallowance of provision towards liability arising on of wage revision payable to employees - as per assessee provision had been made based on a reasonable estimate of the imminent liability consequent on the bipartite settlement talks that were being-held between the Indian Banks Association (IBA) and various Employee Unions - whether CIT(A) failed to appreciate that once liability for an expenditure which is contractual in nature is foisted on appellant the same is allowable as deduction though the same could be quantified based on reasonable estimate only? - HELD THAT:- As decided in assessee's own case [2015 (12) TMI 1283 - ITAT MUMBAI] in case of salary/wage revision, what is important is not the date of signing the agreement nor the date of approval granted by the DRE, what is important is the effective date of commencement. The Tribunal, while relying upon the decision of the Hon'ble Supreme Court in the case of "Bharat Earth vs. CIT [2000 (8) TMI 4 - SUPREME COURT] held that in such a case the incurring of liability was certain and the same could also be estimated with reasonable certainty, although, the actual quantification may not be possible. In the case in hand also as per the agreement and the policy, the wage revision was certain and it could have been reasonably estimated also. Hence, the provision made by the assessee towards wage revision was allowable - Decided in favour of assessee
Disallowance u/s 14 A - HELD THAT:- As decided in assessee's own case we find that facts and circumstances of the case in the present year are similar except that learned counsel of the assessee has submitted that several more decisions have come which have upheld the view that disallowance under section 14 A is not required when the investment is held as stock in trade. In our considered opinion we should follow the doctrine of stare decisis. Accordingly following the same directions as above we remit this issue to the file of the assessing officer. Assessing officer is directed to consider the issue in light of the directions as above after giving the assessee adequate opportunity of being heard. Assessee is at liberty to canvas further case laws as it deems appropriate.
Exclusion of income of foreign branches situated in countries where there is a Double tax Avoidance Agreement based on Article 7 of the respective agreements which provides that the business profits is to be taxed in the respective countries - HELD THAT:- On this issue Ld. Counsel of the assessee fairly agreed that this issue is covered against is the assessee by Tribunal decision in assessee’s appeal.
Income accrued in India - income of the branches of assessee situated abroad - HELD THAT:- Income of the foreign branches of the assessee shall also be taxable in India that is it would be included in the return income filed by the assessee in India and whatever taxes have been paid by the branches in the other countries credit of such taxes shall be given. We find that the Tribunal as above has not held that it is only that income of the foreign branches which was taxed in that foreign country which is to be included in the return of income filed by the assessee. Hence, we are in agreement with the revenue plea that Ld. CIT-A has not properly followed the Tribunal decision as referred by him.
A reading of the notification canvassed by the Ld. Counsel by the assessee also does not help the case of assessee. The notification also does not support the direction of Ld. CIT-A. The doctrine of stare dicisis mandates that we follow the coordinate bench decision as above and hold that the income of the branches of assessee situated abroad shall also be taxable in India and whatever tax have been paid by the branches in the foreign country, credit of such taxed shall be given. Accordingly, we allow the ground raised by the revenue.
-
2017 (2) TMI 1421
Petition is admitted - Reply may be filed within three weeks. Thereafter rejoinder, if any, may be filed within three weeks. Meanwhile, both the parties are directed to maintain status quo regarding the shareholding and composition of the Board of Directors. Meanwhile, immoveable properties of respondent no. 1 company can only be disposed of with the consent of both the parties or with the leave of the Court - List the matter on 03/04/2017 for hearing.
-
2017 (2) TMI 1420
Refund of CENVAT Credit - refund rejected by the authorities on the sole ground that e-BRCs i.e. Electronic Bank Reconciliation Certificate do not stand produced by them - Rule 5 of the Cenvat Credit Rules - HELD THAT:- The basic criteria for refund of credit is that the exporter had realized value of goods or services so exported by them for which purpose production of BRC is required. The requirement of filing e-BRC instead of manual BRC is only a procedural requirement and non-production of the same would not result in denial of benefit if otherwise available to the assessee.
The impugned order denying refund claim on the said sole ground is not justified - matter is remanded to the original adjudicating authority for examining the manual BRC issued by the banks and to re-decide the refund - Appeal allowed by way of remand.
-
2017 (2) TMI 1419
Addition u/s 68 - accommodation entries - HELD THAT:- A.O. was well aware of the fact that the impugned transactions were done by account payee cheques which means that the money has flown from one identified bank account to another identified bank account. Nothing prevented the A.O. to trace the beneficiary bank account but we find that the A.O. has not done any such exercise. No doubt, the burden is on the assessee but considering the nature of the transactions in the light of the statement of the assessee, the A.O. should have made enquiries in depth to trace out the real beneficiaries of the accommodation entries provided by the assessee.
The assessee is a man of small means, therefore, cannot be said to have earned such exorbitant unaccounted income. More so, the assessee is employed in China and his only source of income is the salary received by him in China.
Income Tax proceedings are civil proceedings and the degree of proof is by preponderance of probabilities. Considering the facts in totality in their true perspective, in our considered view, the balance of convenience, in the light of the preponderance of probabilities, is in favour of the assessee.
Commission on accommodation entries - considering the nature of transactions and the acceptance by the assessee being an entry provider, the impugned transactions have to be considered in the light of the acceptance of the assessee. “Don’t shoot the messenger”. The assessee is earning commission by providing such accommodation bills and in our considered view and the understanding of the facts, the only addition that can be made on the given facts is the commission earned by the assessee by providing such accommodation entries. Considering the peculiarity of the facts of the case in hand, addition of the commission @ 3% of the accommodation entries should meet the ends of justice. We, accordingly, direct the A.O. to treat 3% of the accommodation entry as the income of the assessee. Appeal filed by Assessee is allowed.
-
2017 (2) TMI 1418
Disallowance u/s 14A - investment made by the assessee in tax free securities comprise substantial amount of investment made in the group companies for strategic reasons - limited prayer of the assessee is that for making disallowance u/s 14A, this strategic investment should be excluded and disallowance can be made only on the balance amount of investment placing reliance on KOTAK MAHINDRA CAPITAL COMPANY LIMITED [2015 (1) TMI 1289 - ITAT MUMBAI], JM FINANCIAL CONSULTANTS PVT. LTD. (NOW KNOWN AS JM FINANCIAL INSTITUTIONAL SECURITIES P. LTD.) [2015 (11) TMI 1061 - ITAT MUMBAI] and CHEMINVEST LIMITED [2015 (9) TMI 238 - DELHI HIGH COURT]
HELD THAT:- This issue has been decided in favour of the assessee in the judgements relied upon before us. Therefore, accepting the request of the assessee, we send this issue back to the file of AO for giving opportunity to the assessee to submit details of strategic investments. The Assessee shall place on record requisite details to satisfy the AO about the strategic investment. The AO shall exclude the amount of strategic investments and the disallowance u/s 14A shall be made on the balance amount of investment.
-
2017 (2) TMI 1417
Maintainability of Discharge application - HELD THAT:- The jurisdiction of the trial court while exercising power under Section 245 Cr.P.C. is to look into the allegations made in the complaint, statement of witnesses and documentary evidence. The charges can be framed also on the basis of strong suspicion. Marshaling and appreciation of evidence is not within the domain of this Court to go into merits and demerits of the allegation simply because the applicant alleges malus animus against the complainant-opposite party no.2. This Court would also refrain from making imaginary journey in the realm of possible harassment which may have caused to the applicants on account of filing the complaint.
Revision dismissed.
-
2017 (2) TMI 1416
TDS u/s 195 - commission payments made by way of demand drafts and sent through medium of couriers to a non-resident abroad, are remittances deemed to have been received in India, by virtue of Section 5(2)(a) - HELD THAT:- As decided in SRIRAM REFREGERATION INDUSTRIES VERSUS INCOME-TAX OFFICER [2014 (4) TMI 277 - ANDHRA PRADESH HIGH COURT] this Court held that in the absence of a contract between a foreign bank and a bank in India, the bank cannot be taken to be acting as an agent. Therefore, the first question of law has to be answered against the appellant/Revenue, since Section 195 itself is not applicable in such cases.
Income accrued in India - Commission payments were made in the books of accounts of the assessee maintained in India, the commission payments would be deemed to have been received in India - HELD THAT:- The decision of the Supreme Court in Commissioner of Income Tax, A.P. Vs. Toshoku Limited [1980 (8) TMI 2 - SUPREME COURT] . It was held therein that the making of entries in the books of accounts of the assessee cannot be taken to be the receipt, actual or constructive by non-resident sales agents, as the amounts so credited in their favour were not at their disposal or control. Therefore, the second question of law is also answered against the appellant/Revenue.
-
2017 (2) TMI 1415
TP Adjustment - transaction related to ‘’Contract revenue from projects - MAM selection - assessee adopted Cost Plus Method (CPM) as the most appropriate method with GP margin as the appropriate Profit Level Indicator (PLI) - whether the assessee has justified for considering the aggregation of all the projects with AE (the AEs are different) and compared the mean CPM of the projects of related party transactions? - HELD THAT:- Since the projects are operating in different life cycles with different level of completions, it would be more appropriate to compare the margin on an aggregate basis as project- wise one-on-one comparison is not possible and would give distorted results. We are also aware of the nature of business of the assessee. The overall profitability of the projects depends upon various factors such as nature of work, bidding process, location etc. Therefore, we are of the view the TPO/DRP was in error in comparing individual projects margins of transaction with AE with aggregate margins earned from transaction with Non AE’s which is improper as individual margins are being compared with aggregate margin which is impermissible under law.
We find that in the case of the assessee, there are long- term contracts for supply of commodities, and separate transactions are closely linked or continuous that they cannot be evaluated adequately on a separate basis as per examples given in the light of OECD Guidelines para 1.42 as quoted above, we are, therefore, of the view that the combined approach of transaction and aggregation of transaction is the most appropriate method.
Contracts of the assessee with AEs run over a period of 2 to 4 year and as such are long-term contracts justifying as a combined transaction approach as taken by the assessee. We also observe that the assessee had earned lower than mean gross margin in some individual unrelated party transactions also. Therefore, comparing margin of individual contracts with AE’s with margin calculated the average margins entered with Non AE’s does not appear to be as per the principal of transfer pricing.
The assessee is a risk bearing entity and is full of risk bearing manufactures and supply of all power generation equipment’s and as such the assessee is likely to earn low gross margins on international transactions based on the quotient of risk involved. The same is also evident from the fact that the assessee has earned lower than mean gross margins in unrelated party transactions also.
The margin using TNMM method for the assessee for transaction with AE was determined at 10.01% compared to 6.66% for transactions with Non AE’s. We also find that this contention of the assessee was also accepted by the Hon`ble ITAT in earlier years (i.e. A.Y. 2006-07 ,2007-08, and 2009-10) vide order dtd. 03.07.2004. Relying on the analysis undertaken by the assessee, the enter adjustment on account of contract revenue from AE projects was deleted as the transactions having been analyzed under TNMM were held to be at arm`s length. Considering the above facts and circumstances, we direct the Ld.AO to delete the adjustment made by the AO/ TPO. The above grounds of the assessee are, therefore, allowed.
Adjustment to transaction related to "payment for technical service” by determining the arm`s length price of such payments as NIL - TPO has applied CUP method - HELD THAT:- Deputation of the licensor personal in Article 4 and as such payments made in pursuance of the same are distinct from the royalty consideration as specified in the Article 7 and as such is allowable as deduction. We find that the learned that TPO/DRP has failed to appreciate the fact that the payment of royalty and technical services serve two different purposes. We also find that the TPO has accepted the use of TNNM method in A.Y. 2008-09 as most appropriate method for the purpose of benchmarking the impugned International, whereas the approach proposed by the TPO for the year under appeal is absolute contradiction of the approach adopted earlier in TP order for A.Y. 2008-09.
In the succeeding years i.e. A.Y. 2012- 13 and A.Y. 2013-14, the TPO has accepted this factual position by not making any adjustment for amounts paid for services covered under Article 2, Article 3, and Article 4 of the agreement in case of Manideep Unit and Article 4.2 in respect of agreement in the case of Prithla Unit. The additions made in A.Y. 2012-13 amounting pertained to sums, details of which were furnished by the assessee himself, which were covered under Royalty Agreements and that whose ALP was taken at Nil. The learned Counsel for the assessee, has furnished the details of adjustments vide Anx-A for A.Y. 10-11 and Anx-B for A.Y. 11-12, which are wrongly sustained by the DRP in connection with payments for technical services wrongly held to be already covered in Royalty agreement specifying the exact nature of the sum so paid along with the exclusion clauses relating to Royalty agreements to substantiate the claim of the assessee that amounts so adjusted by the TPO /DRP for A.Y. 2010-11 and A.Y. 2011-12. Since the TPO has accepted the fact that above nature of services does not fall under the clause of royalty as per TCA, we are of that view that no adjustment is called for in the case of the assessee. Therefore, the TPO was not justified in making adjustment as the same were on account of payments not covered under the Royalty Agreement.
We are of the considered view that the payments made in respect of Mandideep and Prithla Units as sustained by the DRP by holding as covered by royalty agreement are not sustainable in law as the same are not covered under the royalty clause of respective TCA dtd. 01.01.2006 in respect of Mandideep units and dtd. 26.04.2006 in respect of Prithla Unit for aforesaid units. Accordingly the TP adjustments of ₹ 1,17,23,967/- for A.Y. 2010-11 and ₹ 34,18,088/- for A.Y. 2011-12 are directed to be deleted.
Denial of relief to the Appellant in relation to international transaction of payment of technical services - HELD THAT:- This amount is appearing at Serial No. 11 of the details of payment which relates to payment made for support in respect of business development and not for design and drawing of contract products hence, same is covered by exclusion clause in 3.2 of the agreement relating to general technical assistance by active participation in establishing marketing, design, production, assembly, quality control testing application, installation, commissioning and servicing. Therefore, this amount is not covered by Ro agreement; hence, it is required to be deleted. Hence, this grounds of appeal is allowed.
Not allowing set-off of surplus revenue / profit exceeding the arm`s length price earned from other transaction while computing the transaction-by- transaction analysis approach - HELD THAT:- We are of the view that the decisions rendered in above ground would take care of this ground. However, even if there is any surplus of revenue /profits remains after giving appeal effect to this order, the AO may consider for allowing set-off if admissible under the law. These grounds are disposed-of accordingly.
Disallowance of payments made by the assessee to its overseas parent company for the purchase of technical drawings and designs that same in the nature of royalty on which tax was required to be deducted at source - HELD THAT:- we are of the considered opinion that the assessee has purchased copyrighted items in form of technical drawings and designs only and the amount paid on account of supply of technical drawings and designs is not in the nature of royalty, hence, no TDS was required to be deducted under section 195 of the Act. Therefore, disallowance made under section 40(a)(ia) of the Act by The AO/TPO and sustained by the DRP is not justified hence, directed to be deleted.
Disallowance of warranty provisions - HELD THAT:- Making a provision for all known liabilities is a fundamental principle of the mercantile system of accounting and the assessee by provisioning for the liability arising from warranty clauses of the long- term contracts has to abide by such accounting principles. It is seen that the assessee had debited the relevant expenses to the warranty provision account. For this purpose, the assessee has furnished project-wise details of the warranty expenses booked during the year and also explanation regarding the basis of claiming the same as business expenditure. As submitted to the AO that once the warranty period specified under the contract lapses, the surplus balance lying in the warranty provision account is transferred back to the profit and loss account.
As concluded that the provision for warranty is in the nature of an ascertained liability (with a reasonable estimate of the quantum) and not a “contingent liability”, hence, a deduction for the same should be allowed while computing the total income of the assessee for the relevant assessment years.
We find that the assessee has made provision for warranty for each project separately taking into consideration all the factors with regard to the scope of work, terms of warranty agreed with the customers and estimated cost of warranty based on earlier years’ experience. This method of warranty provisions was consistently followed over the years, which is also in accordance with the Accounting Standard under section 145(2). Thus, basis of provision was not an ad-hoc or contingent as alleged by the AO. With regard to the reasonableness of the warranty provision, we had verified from the warranty provision reversed on yearly basis and the same was found to be reasonable. DRP is justified in allowing the deduction on account of warranty provisions. In the result, grounds taken by the Revenue for the A.Ys. 2010-11 and 2011-12 with respect to provision of warranty are dismissed.
-
2017 (2) TMI 1414
Limitation and maintainability of petition - oppression and mismanagement - appellant(s) are neither directors, nor shareholders of the 1st respondent company - appellant(s) have specifically pleaded that the respondents failed to perform statutory filing before the Registrar of Companies and no AGM held since the year 2012 - period of limitation - HELD THAT:- While accept that the appeal in so far it relates to allegation made for the period 2003 to 2012, hold that the Company Petition in so far it relates to alleged oppression and mismanagement during the period between 2013, 2014 and 2015 was not barred by Limitation and Tribunal was required to confine the petition for the said period.
Form 20B, in which annual return has been filed by company with the Registrar of Companies for the financial year beginning on 31st March 2012 has been enclosed as Annexure-B to this appeal. From the said Form 20B (refer Section 159 of the Companies Act 1956), provides details of shareholders as on 30th September 2012 (Annexure-A to the Form). Therein, against the name of 1st appellant, " Esquire Electronic Inc." it has been shown as a foreign company having 429740 equity shares with the 1st respondent company which come to about 9.54% as on the date of filing. In so far as 2nd appellant " Esquire Electronics (India)" a firm, it is shown that the 2nd appellant have 84680 equity shares of 1st respondent company, which comes to about 1.88% at the time of filing.
Appellant(s) have, prima-facie, made out a case that they are the shareholders of the 1st Respondent company, jointly hold 1/10th of the total share holding and thereby they have locus to file the petition alleging oppression and mismanagement. The finding of Tribunal that appellant(s) lack locus standi to file Company Petition as they are not the director (s) or shareholder or member of the 1st respondent company is not based on record.
For the reasons and finding as recorded above, we set aside the part of impugned judgement dated 6th October 2016 passed in Company Petition in so far as it relates to maintainability of the petition for the period 2013, 2014 and 2015 onwards and remit the case to National Company Law Tribunal, Principal Bench, New Delhi to take decision on merit, limiting the prayer with regard to alleged 'oppression and mismanagement', if any, made between the year 2013 onwards.
-
2017 (2) TMI 1413
TP adjustment - disallowance of the Technical and Management costs - payment to parent company - payment relates to “Technical Development and Production Support’ and ‘Technical Marketing Support’ - HELD THAT:- As decided in assessee's own case [2015 (8) TMI 1473 - ITAT CHENNAI] entire matter has to be remitted back to the file of Ld. TPO for denovo consideration because both the assessee as well as the Revenue has not examined the issue with respect to the correct factual matrix. “Management services” and “Technical services” false under different field and the nature of work involved both these services are different.
When the assessee has made payments to its parent company it has to establish and justify the nature of payment and the nature of service received for the purpose of determining Arms length price in Transfer pricing matters. The onus is on the assessee to substantiate its claim.
Just because the operating cost incurred by the assessee company is less than the operating cost of the comparable companies, the claim of expenses incurred towards payment made to its parent company on an adhoc basis cannot be justified - case the entire confusion has arisen because the assessee company has not submitted the evidence for the service rendered by the parent company to the assessee company against which the payments are made to the parent company by the assessee company. With these observations we remit the matter back to the file of TPO for fresh considerations - Appeal of assessee is allowed for statistical purposes
Comparable selection - consideration of risk related adjustment fpr comparable selection - HELD THAT:- In two wheelers space the company’s major customers are TVS, Bajaj Auto and Hero Moto. In the Four wheeler segment, the company’s customers are Tata Motors, Mahindra and Mahindra, Hyundai, Ford and General Motors. The major exports customers are General Motors, Suzuki and Piaggio. Being so, the AO required to reexamine the claim of risk adjustment and replacement adjustment claimed by the assessee and suitable adjustments to be given after apprising the TP documents submitted by the assessee. With this observation, we remit the issue to the file of AO for the purpose of determination of risk adjustment to be granted to the assessee.
Inclusion of Loss on Forex fluctuation in Operating Expenditure - reinstatement of foreign currency as per accounting standards - HELD THAT:- As relying on M/S. PENTASOFT TECHNOLOGIES LTD. [2010 (7) TMI 75 - MADRAS HIGH COURT] we are inclined to decide the issue against the assessee holding that foreign exchange loss is a part of operating expenditure.
Non-consideration of advance tax payment - HELD THAT:- In our opinion, if it is duly paid, as an advance tax relevant to the assessment year due credit to be given and thereafter the interest u/s.234B & 234C of the Act to be computed.
-
2017 (2) TMI 1412
TDS u/s 195 - non-deduction of tax at source in respect of the payments made outside India to non-resident film producers for distribution of their films in India - addition u/s 201(1) and u/s 201(1A) - assessee has purchased rights to exhibit the cinematographic films in various mediums for a certain period of time - whether payments made to non-resident film producers is royalty under section 9(1)(vi) ? whether payments made towards rights for exhibition and telecasting of cinematographic films in different platforms like television and satellite broadcasting did not constitute payments for sale, distribution, exhibition of cinematographic films? - HELD THAT:- The law has expressly excluded consideration paid for exhibition of cinematographic films from the ambit of section 9(1)(vi). Further, irrespective of the medium in which the cinematographic films have been exhibited, the same only constitutes “exhibition of cinematographic films”. Hence, the consideration paid by the assessee to the non-residents does not fall within the ambit of “royalty” u/s. 9(1)(vi) of the Act. We find that section 90(2) of the Income tax Act which states that either the provisions of the Income tax Act or the DTAA, whichever is more beneficial to an assessee, would be applicable to the assessee. Further, CBDT Circular No.728 dated 30.10.1995 clarifies that tax should be deducted at source as per the provisions of the Act or DTAA whichever is more beneficial to the assessee. Since the provisions of the Act are beneficial to the assessee, the same would apply and consequently the sums are not chargeable to tax in India and do not warrant deduction of tax at source u/s 195 of the Act.
Hon’ble Supreme Court in the case of GE India Technology Cen. (P) Ltd vs CIT [2010 (9) TMI 7 - SUPREME COURT OF INDIA] had held that TDS obligation would arise on the assessee only when the sum is chargeable to tax in India u/s 4, 5 & 9 of the Act.
We hold that the assessee in the instant case cannot be treated as assessee in default u/s 201(1) of the Act and consequently the interest u/s 201(1A) of the Act could not be levied on the assessee. Accordingly, the grounds raised by the assessee are allowed.
-
2017 (2) TMI 1411
Condonation of delay - reasons for delay - sufficient cause - delay of 87 days in filing the appeal before this Tribunal - reasons too vague and genera - Finance Manager, who was handling the tax matters, had resigned from the office during the month of February,2016 and did not hand over the relevant assessment order and other documents to the successor while relieving from the office of the petitioner causing delay - HELD THAT:- As seen from the petition, filed by the assessee, the assessee has not mentioned the name of Finance Manager, who has received the impugned the assessment order, against which the assessee is in appeal before us. It is also not mentioned the date on which the Finance Manager was relieved from the duty and the reason on which he was not handed over the appeal documents to the assessee for further action.
The reasons advanced by the assessee in its condonation petition are very vague and it was too general. The reasons advanced by the assessee cannot be considered as a reasonable one so as to condone the delay of 87 days. The approach of the assessee herein is very casual and requires no sympathy from our end, since he has not shown good and sufficient reasons to condone the delay.
-
2017 (2) TMI 1410
TP adjustment - selection of comparable - functionally comparable -inclusion of R systems international Ltd alone - Different Financial year - HELD THAT:- ssessee has made out a case, supra, we remit this matter to the TPO for re-examination and readjudication.
TP adjustment - selection of comparable - functinal dissimilarity - ICRA Online Ltd, with unadjusted margin of 43.39%, has to be rejected for the reason that it is not functionally comparable and fails export earning filter. - HELD THAT:- assessee has made out a case, and hence direct the TPO to exclude the above comparables.
Provision for bad and doubtful debts as non-operating in nature - HELD THAT:- The provision for doubtful debts fit the description of "operating items" associated with the rendering of services and should be considered as part of the operating costs and relied in case of Techbooks International Pvt. Ltd. Vs. DCIT [2015 (7) TMI 473 - ITAT DELHI]. Thus Provision for bad and doubtful debts should be treated as operating expenses as they are closely linked with the business operations and accordingly direct the TPO to do so.
Computation of working capital adjustment - TPO is of opinion that working capital adjustment should be restricted to 0.85% - HELD THAT:- TPO has not given the basis of arriving at the average cost of capital of the comparable companies. As assessee relied on the decision of this Tribunal in Moong Controls India P Ltd [2015 (11) TMI 1719 - ITAT BANGALORE] wherein as directed the TPO to allow actual adjustment towards the differences in the of working capital position between the assesseee and the entrepreneurial companies selected as comparable . We direct the TPO to follow this decision.
Non providing appropriate risk adjustment - assessee is a captive contract IT enabled service provider to its AEs. - HELD THAT:- In the case of Chryscapital Investment Advisors (India) Pvt. Ltd. Vs DCIT [2015 (4) TMI 949 - DELHI HIGH COURT], wherein held that appropriate adjustments should be carried out in situations where there are differences between the tested parties and comparables and in case such differences perceptible in the comparables cannot be eliminated on account of adjustments or otherwise, then such comparables have to be rejected. We heard the rival submissions and find that the assessee has made out a case, supra, and hence direct the TPO to make appropriate risk adjustment.
Depreciation adjustment on account of difference in the rates of depreciation of the assessee vis- à-vis comparable companies - HELD THAT:- The arithmetic mean OP/ TC margin (post factoring the impact of depreciation) of the comparable companies considered by the TPO is 22.80% which falls within the + / -5% range of the OP / TC margin of 17.63% (as computed by the TPO) earned by the assessee during the FY 2009-10. Accordingly, the prices of international transactions of the assessee in relation to provision of IT enabled services comply with the Arm's Length standard prescribed under the Indian Regulations.We remit this matter to the TPO for re-examination and re-adjudication
-
2017 (2) TMI 1409
Legality of an order of the Additional Commissioner, Bolpur Central Excise and Service Tax Commissionerate - non-applicability of Rule 8(3A) of the Central Excise Rules, 2002 - Held that:- In the writ petition out of which this appeal arises however did not contain any prayer for declaring the aforesaid provision as ultra vires. In course of submission before us by the learned Counsel for the appellant urged this point before us but as it was not taken before the learned First Court, we do not think at the appellate stage question of validity of the aforesaid provision ought to be addressed.
The appeal and the stay petition shall stand dismissed as not pressed.
-
2017 (2) TMI 1408
CENVAT Credit - input services - commercial construction or industrial construction services received by the appellant for setting up a new manufacturing plant adjacent to the existing plant within the same factory premises - denial of credit for the reason that the services are received in regard to immovable property - Board Circular No. 98/1/2008-S.T., dated 4-1-2008 - Held that:- Undisputedly the amendment brought forth from 1-4-2011 does not have a retrospective application. The definition of input services as it stood prior to 1-4-2011 included the words “setting up of factory”. Therefore the appellants are eligible for credit and the adjudicating authority has rightly dropped the proceedings - credit allowed - appeal allowed - decided in favor of appellant.
-
2017 (2) TMI 1407
Corporate Insolvency Resolution Process - Declaration of moratorium and public announcement - Held that:- In response to the demand notice dated 25th January, 2017 given by the applicant, the operational creditor vide their letter dated February 6, 2017 has written to the applicant that the company is badly suffering from financial crisis and due to various reasons, it has resulted in erosion of the company's net worth and has been referred to BIFR and the reference pending before the BIFR has been abated and revival of the corporate debtor under the relevant provision of SICA Act has been jeopardised and everything is at standstill. However, in consultation with the company's legal advisors, the company is seeking their guidance to revive the company under the guidance of the Adjudicating Authority under the IBC, 2016. Finally, they sought some breathing time and assured the operational creditor that the payment of all dues will be made.
In the circumstances mentioned above, we admit the petition for initiating the Corporate Resolution Process and declare a moratorium and public announcement as stated in section 13 of IBC 2016
-
2017 (2) TMI 1406
Confiscation - Sections 111(j) and 111(f) of Customs Act - Held that:- The provisions of clauses (f) and (j) of Section 111 of the Act, providing for confiscation apply only in the case of violations specifically mentioned therein.
The facts and circumstances of the transaction before us are not in dispute. Insofar as the purpose of the import was clearly stated as being for use in the proposed ‘Sethusamudram Project’ which stood frustrated, the bona fides of the transaction is not in dispute - In the present case, we agree with the findings of the CESTAT that the provisions of 111(f) and 111(j) would not stand attracted insofar as there is no contravention of the stipulations contained therein.
The substantial questions of law are answered in favour of the assessee - appeal dismissed - decided against revenue.
-
2017 (2) TMI 1405
Disallowance u/s. 40A(3) - cash expenditure of the assessee exceeding permissible limits - Held that:- It is not disputed that assessee has produced books of accounts before AO. In fact the assessment order specifically states so. Rigours of Sec. 40A(3) is attracted only where payments in relation to expenditure exceeded A 20,000/- in a day to a person. In our opinion, methodology adopted by the ld. Assessing Officer was incorrect and ld. Assessing Officer ought have compiled the instances of cash payments if any in excess of the limits, from the cash book maintained by the assessee. Thereafter he should have called for explanation of the assessee, in each case for which there was excess cash payment. In the facts and circumstances of the case, we are of the opinion that the issue requires a fresh look by the ld. Assessing Officer. We set aside the orders of the lower authorities and remit the question for reconsideration - Appeal of the assessee allowed for statistical purpose
Levy of penalty u/s.271B - failure to conduct the Audit under section 44AB of the Act and to furnish the reports - Held that:- It is not sufficient that an explanation is given. Such explanation has to be proved and substantiated. Nothing has been brought on record by the assessee to substantiate its argument that its Accountant had resigned or to show that non compliance with the statutory provisions was due to difficulties beyond the control. Assessee was in the business since many years. For the preceding assessment year also assessee had filed its tax audit report belatedly. We are thus of the opinion that assessee could not bring out any reason which could be termed as reasonable. In our opinion, levy of penalty u/s.271B of the Act was justified. - Decided against assessee.
-
2017 (2) TMI 1404
Denial of deduction under Section 80P - assessee a Co-operative Bank claimed deduction - Held that:- As rightly submitted by the assessee, the Madras High Court in the assessee’s own case [2017 (4) TMI 181 - MADRAS HIGH COURT] found that the assessee Co-operative Bank is not a bank and it is only a credit society. The High Court further observed that the activity of the assessee in accepting deposits, advancing loans etc., are confined only to its members and also restricted to a particular geographical area. Therefore, the High Court found that the assessee’s society is eligible for deduction under Section 80P(2)(a)(i) - no reason to interfere with the order of the lower authority. Accordingly the same is confirmed. - decided against revenue
............
|
9911796707
