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Showing 141 to 160 of 1477 Records
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2016 (4) TMI 1338
TPA - comparable selection - Held that:- The business model of the Assessee is highly employee intensive thus companies functionally dissimilar with that of assessee need to be deselected from final list. Employees' cost to sales ratio also to match to be selected as comparable.
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2016 (4) TMI 1337
Exemption u/s 11 denied - assessee has violated the provisions of the Act under section 11(5) r.w.s. 13(1)(d) by investing its funds to the extent of ₹.17,00,000/- in Kumari Chit Fund - Held that:- On an identical issue and similar facts and circumstances, the Coordinate Bench of the Tribunal in the case of DDIT (EXEMPTIONS) -I CHENNAI VERSUS THE INDIA CEMENTS EDUCATIONAL SOCIETY DHUN BUILDINGS [2016 (3) TMI 73 - ITAT CHENNAI] wherein held that the requirements of sec. 13(1)(c)(ii) is that the trust should apply the funds in a concern in which they themselves are interested, if there was a mandatory provision in the trust deed for such a purpose.
Such a mandate in the trust deed should have existed and could not have been brought in by amending the trust deed at a later stage after that crucial date, even if the trust deed authorized the trustees to amend the trust deed to bring in the mandatory condition or requirement for them to invest funds of the trust in a concern in which they might be interested. In is admitted fact in this case that there is a violation of sec. 13(1)(c) of the Act as the assessee invested funds in a limited company where the trustee is the Managing Director and his wife is a Director - decided against assessee.
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2016 (4) TMI 1336
Disallowance u/s 14A r.w. rule 8D - establishment of nexus between the expenses incurred and the exempt income - Held that:- As relying on assessee's own case we restore the issue of disallowance under section 14A of the Act r.w. Rule 8D of the IT Rules to the file of the AO with a direction to consider the issue afresh, after affording the assessee adequate opportunity of being heard and to submit details/submissions required in the matter, and to then adjudicate the matter afresh.
Claim of loss from derivative transactions (futures and options trading) - CIT(A) giving directions to the AO to verify the assessee’s claim - power of CIT-A - Held that:- As clearly evident that the learned CIT(A) in issuing the directions, he did to the AO, went beyond the grounds raised in the assessee’s appeal and the issues which were the subject matter of the order of assessment, thereby clearly exceeding his jurisdiction in the matter. As decided in the case of CIT vs. Sardari Lal and Co. [2001 (9) TMI 1130 - DELHI HIGH COURT] has held that the CIT(A) has no power to direct the AO to bring to tax a new source of income, which was not considered by the AO in the order appealed against him. Wherever the question of taxability of income from a new source of income is concerned, which has not been considered by the AO, the jurisdiction to deal with the same in appropriate cases may be dealt with under section 147/148 and 263 if requisite conditions are fulfilled. It was also observed that in the presence of such specific provisions, the learned CIT(A) had no power to tax a new source of income not considered by the AO in the order of assessment which was appealed against before him - we delete the directions/observations issued by the learned CIT(A) to the AO - Decided in favour of assessee
Loss from derivatives (future & options) trading - enhancement of assessment without affording the appellant reasonable opportunity of showing cause against such enhancement as provided u/s 249(2) - Held that:- From the observations and directions of CIT(A) it is not clear as to how the business loss from derivatives (futures and options) trading has been allowed by the AO, expressing his disagreement therewith and further directing the AO to re-examine this issue, in our view, can lead to a possible enhancement of assessment and/or levy of penalty as the case may be. As contemplated under section 251(2) of the Act, the learned CIT(A), in not affording the assessee reasonable opportunity to show cause against such adverse findings/directions to the AO for examination of a fresh issue that could lead to possible enhancement, etc., committed an error - we hold that the learned CIT(A) erred in rendering such observation and directions on the issue of losses from derivatives (futures and options) trading without affording the assessee reasonable opportunity of being heard as contemplated under section 251(2) - Decided in favour of assessee
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2016 (4) TMI 1335
Imposition of penalty u/s 54(1)(1) of the U.P. VAT Act - tax was deposited on 26.3.2009 i.e. with a delay of about six days - Held that:- It is admitted on record that the tax was to be deposited on or before 20.3.2009. The revisionist got the draft of the entire amount of the tax prepared on 13.3.2009 at Mumbai which was to be deposited at Agra and probably on account of some postal delay it reached to the authorities with a delay of six days. There is no dispute that the draft was got prepared on 13.3.2009 i.e. well within time and, as such, there was no reason for the revisionist to have delayed the deposit except for the bonafide delay which may have occurred in transiting the same from Mumbai to Agra.
The imposition of penalty on the revisionist is wholly illegal and arbitrary - revision allowed.
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2016 (4) TMI 1334
Long Term Capital Gain (LTCG) arising out of transfer of residuary right in the land - determining the value of consideration arising out of transfer of capital asset - Held that:- We have seen the conveyance deed dated 30.12.2007 executed by assessee in favour of the purchaser which is available in the form of Paper Book. The said conveyance deed is duly witnessed by mother of assessee i.e. Smt. Vimlaben Dwarkadas Sanghvi.
The receipt of consideration executed by assessee is for ₹ 7.00 Crores. No documentary evidence was filed by the assessee which may prove the fact that mother of assessee has offered the amount of ₹ 75,00,000/- to tax.
The assessee has executed the sale documents as absolute owner and further executed the receipt of ₹ 7.00 Crores as sale consideration. By executing the receipt of consideration of ₹ 7.00 Crores, the assessee acknowledged the consideration/sale price. We have seen that the said facts were considered and discussed by the CIT(A) in his order. The order of CIT(A) is reasoned one and does not require any interference at our end. - decided against assessee.
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2016 (4) TMI 1333
Works contract - classification of contract after 01.06.2007 where contract entered into prior to 01.06.2007 - Held that:- Appeal admitted - Mr. V. Giri, learned senior counsel along with Mr. Ananga Bhattacharyya and Mr. Nikhil Nayyar, learned counsel have entered appearance on behalf of some of the respondents. The said respondents need not be issued notice.
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2016 (4) TMI 1332
Family settlement - Decree for possession - ownership of the Hauz Khan Enclave property - who is the real owner of the suit property - suit was contested by Sudhir, contending that the plaint was liable to be rejected as Satyapal merely claimed that the property was purchased in Sudhir's name which in effect amounts to an assertion of its being benami under the provisions of Benami Transactions (Prohibition) Act, 1988.
Held that:- Quite apart from the procedural impropriety of the impugned judgment, this Court is also of the opinion that the learned Single Judge's reasoning is flawed, inasmuch as it holds that an antecent claim or right is to exist, before a valid and enforceable family settlement can be the basis of a civil action.
The possibility of a future dispute is enough precondition for members of one family to arrive at a settlement, with a view to avoid it. Existence of real or claimed title is not the basis of the settlement.
Whether, for a valid settlement, to avoid future disputes, it is a precondition that all members of a family have to enter into a settlement? - Held that:- This Court does not see any condition, or barrier in the form a necessity to involve all members of a family. If the disputes are inter se as between two members, there is no bar to the designation of their settlement as a family arrangement or settlement. It has the objective of orderliness in the title of each member of the family and crucially, ensures peace and harmony amongst all of them.
If the law is that those not considered family members can enter into binding "family" arrangements, it cannot be that all members of a family have to be party to a settlement as a precondition for its binding nature. This argument is, accordingly rejected.
The impugned judgment, inasmuch as it dismisses Satyapal's suit, is set aside.
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2016 (4) TMI 1331
TDS u/s 194A on Interest - interest credited/paid on the fixed deposit receipts purchased by the New Okhla Industrial Development Authority (NOIDA) - Whether NOIDA is a corporation established by U.P. Industrial Area Development Act, 1976 and not a body established under the aforesaid Act? - Held that:- The question of law framed by us has been answered in negative by judgment of Commissioner of Income Tax (TDS) & Anr. Vs. Canara Bank [2016 (5) TMI 570 - ALLAHABAD HIGH COURT].
NOIDA is a Corporation established by the Uttar Pradesh Industrial Area Development Act, 1976.
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2016 (4) TMI 1330
Condonation of delay of 651 days in filing the appeal - appellant argued that the said OIA dt 28/12/12 was received by Sh. A. Banerjee, Executive of the appellant on 23/1/2013. That Sh. A. Banerjee did not bring the OIA dt 28/12/12 to the notice of the management and retired on 1/2/2013 - Held that:- No affidavit of Sh. A. Banerjee , employee of the appellant has been filed in these proceeding to justify the delay. Subsequent searches in the office records made the appellant recover the said OIA dt 18/12/12. The reasons for delay of 657 days have not been satisfactorily explained by the appellant - delay cannot be condoned - COD Application dismissed.
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2016 (4) TMI 1329
Anti-competitive Activities - Whether the appellants could be accused of bid-rigging/collusive bidding and held guilty of acting in contravention of Section 3(1) read with Sections 3(3)(a) and 3(3)(d) of the Competition Act, 2002 merely because they quoted substantially similar price for the product, namely, Polyester Blended Duck Ankle Boot Rubber Sole (hereinafter described as 'the Jungle Boots'),which is required to be manufactured as per the specifications prescribed by the Director General (Supply and Demand) (DGS&D) and is mostly purchased by the Government Agencies like Paramilitary Forces, State Police, Railways etc. on the basis of the Rate Contracts executed on annual basis? - Held that:- Unfortunately, neither the DG nor the Commission gave due weightage to the aforesaid factors and heavily banked on the factors like identical or near identical price quoted by the appellants in response to Tender Enquiry dated 14.06.2011 and the so-called plus-factor for recording a finding that the appellants had contravened Section 3(1) read with Sections 3(3)(a) and 3(3)(d) of the Act - the findings and conclusions recorded by the DG and the Commission that the appellants had indulged in collusive bidding/bid-rigging and thereby violated Section 3(1) read with Section 3(3)(a) and 3(3)(d) of the Act are legally unsustainable and the impugned order is liable to be set aside.
Whether in exercise of powers vested in it under Section 27(b) of the Act, the Commission could impose penalty on the total turnover of the appellants for the three preceding financial years? - Held that:- The Commission committed grave illegality by imposing penalty @5% of the average turnover of the appellants in respect of all the products manufactured by them for the last three preceding financial years. The respondents have not disputed that all the appellants are multi-product companies and the Jungle Boots is only one of the products manufactured by them - the Commission is not entitled to impose penalty on the defaulting enterprise/person by taking into consideration its total turnover for the preceding three financial years.
The impugned order is set aside and the penalty imposed by the Commission on the appellants is quashed - appeal allowed.
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2016 (4) TMI 1328
CENVAT credit - excess availment of CENVAT credit - Revenue claims that discount which had been given to Bhushan Steel contained certain duty element and, therefore, Bhushan Steel should reverse the CENVAT credit duty contained in the discount.
Held that:- It is not disputed by learned counsel for the appellant that Tata Steel did not claim any refund of duty on the reduced price nor is it the case of the appellant that it is not on account of subsequent negotiations that had taken place between Bhushan Steel and Tata Steel that the price of inputs procured by Bhushan Steel was reduced - Such being the position when Tata Steel has not claimed any refund of duty from the department, the department was not justified in imposing any duty with interest and penalty on Bhushan Steel.
No substantial question of law, therefore, arises for consideration - appeal dismissed.
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2016 (4) TMI 1327
Penalty u/s 271(1)(c) - no notice to legal heir assessee in spite of the fact that the Assessing Officer was made aware that the assessee had expired on 20th March 2011 - order passed against a dead person - delay in filing return of income - AO while completing the assessment treated the return of income as invalid and held the income declared by the assessee as undisclosed income - Held that:- In the course of penalty proceedings under section 271(1)(c), the Authorised Representative in his letter dated 16th June 2011, not only explained the reason for delay in filing the return of income but also brought to the notice of the Assessing Officer the fact that the assessee had expired on 20th March 2011 and also furnished a copy of his death certificate.
In spite of the fact that the Assessing Officer was made aware that the assessee had expired on 20th March 2011, instead of bringing his legal heir on record, the Assessing Officer proceeded to pass the impugned penalty order in the name of deceased assessee. As rightly held by the learned Commissioner (Appeals), order passed against a dead person has no legal affect, hence, invalid in law. - Decided in favour of assessee.
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2016 (4) TMI 1326
Capital gain computation - Joint Development Agreement - AO adopting the cost of construction as sale consideration - CIT (Appeals) has directed AO to compute the capital gains by considering the sale consideration as the fair market value based on the government record - Held that:- Identical issue has been considered and decided by the co-ordinate bench of this Tribunal in the case of Shankar Vittal Motor Co. Ltd. [2016 (4) TMI 1129 - ITAT BANGALORE] wherein held because at the time of signing JDA the capital gain has to be computed only on the guidance value of the land. Even otherwise, if any capital gains to be accrued in future in favour of assessee after receiving the possession of the property. Certainly that would also be subject to capital gains. Therefore, in our final conclusion valuation of the capital gain should be appropriate to adopt the FMV/asset as deemed consideration, but not cost of the construction. - Decided against revenue
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2016 (4) TMI 1325
Validity of N/N. FD 21 CSL 2014(II), dated February 28, 2014 - Discriminatory nature of notification or not? - KVAT Act, 2003 - Levy of VAT on Liquor - classification of dealers based on value addition criteria - Held that:- Having gone through the detailed judgment of the learned single judge in M. Madhava Gowda v. Under Secretary to Government [2015 (9) TMI 1438 - KARNATAKA HIGH COURT], where it was held that The classification of dealers based on value addition criteria for the purpose of tax levy and exempting the dealers based on area criteria cannot be held to be discriminatory - this court is of the opinion that the present writ petitions also deserve to be dismissed for the same reasons - petition dismissed.
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2016 (4) TMI 1324
Genuineness of remuneration paid to Managing Director - extra-ordinary increase the remuneration - Disallowance u/s 40A(2)(b) as excessive and unreasonable amount paid - Held that:- section 40A(2)(b) disallowance is not to be invoked when the payees already stand assessed at maximum rate. The Central Board of Direct Taxes has also issued a circular on 06-07-1968 directing the assessing authority not to invoke the impugned disallowance in absence of any tax evasion being noticed. - Decided against the revenue.
Rejection of books of accounts - Estimation of income - reduction of GP @44.1% as compared to 49.46% in the previous year - Held that:- assessee had responded to all of the scrutiny show cause notices. The Revenue does not point out either any mis- reading of evidence or perversity in the lower appellate findings under challenge. We do not find any error in the CIT(A)’s action under challenge deleting the impugned addition. - Decided in favor of assessee.
Addition of notional income - Notional versus actual interest on delayed refund of security deposits placed with its associate enterprise - deposited in lieu of availing usages rights on industrial land for carrying out manufacturing activities. - The assessee did not pay any rent except this lumpsum refundable amount. - Held that:- he assessee has already received its security amount latest by 23-08- 2007 relevant for assessment year 2008-09 only and not to the impugned assessment year 2009-10. We hold in these facts that the deemed interest addition could not have been made in the impugned assessment year as no such interest accrues or arises in financial year 2008-09. We accept assessee’s arguments against this interest addition and reject those raised at Revenue’s behest. - Decided in favor of assessee.
Restriction on depreciation claim - bifurcation of value of the land - AO observed in assessment order that the building/bungalow was very old. No deprecation is allowable on the plot land - Held that:- Both the lower authorities discuss the location factor of the land and dilapidated state of the bungalow/building in question in arriving at the impugned value. There is no material placed on record dispelling the same - Decided against the assessee.
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2016 (4) TMI 1323
Correctness of TDS deducted by the Indian Employer - Taxability of salary income of non-resident - exemption claimed under Section 5(2) - taxability of foreign allowances - it was contended by the assessee that, assessee was sent on a foreign assignment and received salary as well as allowances. The salary was to be taxed in India. However, the allowances cannot be taxed in India, as it is received outside India and the employer deducted TDS wrongly. - Held that:- it is an admitted fact that the assessee has remained as an employee of IBM India Pvt. Ltd. and the law of land would remain applicable to the assessee and further, salary was continued to be paid under home location salary plan. As the salary was paid to assessee’s home location bank, TDS was rightly deducted by IBM India Pvt. Ltd. Accordingly, Form 16 was issued to the assessee. - Decided against the assessee.
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2016 (4) TMI 1322
Issuance of fresh SCN for penal provisions - power of Commissioner (Appeals) to instruct the Department for issuance of fresh SCN - Held that:- Since the Commissioner (Appeals) has held that penalty cannot be invoked under Section 11AC, he could have straightaway, allowed the appeal without insisting for issuance of fresh show cause notice seeking imposition of penalty under Rules 57AH and 173Q of erstwhile Central Excise Rules, 1944 and the present Rules 12 and 13 of Cenvat Credit Rules, 2001, which were not proposed for recovery in the original proceedings.
Since the Commissioner (Appeals) has travelled beyond the proposals made in the original show cause notice dated 11th March, 2005, directions for issuance of subsequent show cause notice is not in conformity with law - appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1321
Addition made u/s 35 being the amount spent for purchase of plant and machinery - Held that:- AO or the ld. DR has not controverted this fact that the R & D program of the assessee has been approved by the Government of India and other relevant appropriate authorities and efforts of the assessee on R & D were awarded by National Award in 2007 and other appreciations by ACMA. We cannot ignore this fact that the assessee’s books of account are properly audited and subject to public scrutiny by other statutory bodies such as Registrar of Companies and SEBI etc. which fact cannot be ignored or rejected at the threshold which conclusively supports the claim of the assessee towards purchase of plant and machinery for R & D purpose. On the basis of foregoing discussion, we are unable to see any ambiguity or perversity or any other valid reason to interfere with the impugned order of the ld. CIT(A) and thus we uphold the same. Accordingly, we approve the conclusion of the ld. CIT(A) who deleted the baseless addition and disallowance made by the AO and hence the sole ground of the Revenue being devoid of merits is dismissed.
Disallowance of the software purchase made by the appellant for the purposes of its R&D - Held that:- One must not forget that the Revenue, which has powers regarding discovery, inspection, production and calling for evidence as well as survey, search and seizure and requisition of books of accounts and the inability of assessee to produce the supplier could not lead to an adverse inference against the assessee that the supplier was bogus or non-existent. In the present case, the AO has not made any further investigations or enquiry about the supplier and that too he accepted existence of M/s Exim for other purchases which was effected through the same period. The ld. CIT(A), despite confirmation of accounts placed before AO, incorrectly held that there is no confirmation. Per contra, the assessee has discharged the onus cast upon it to establish the genuineness and purchases and onus was shifted to the Revenue but not properly discharge by the AO for making the addition. Thus, conclusion of the AO as well as the ld. CIT(A) is not sustainable. Hence we demolish the same and Ground Nos. 1 to 3 of the assessee are allowed.
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2016 (4) TMI 1320
Amount of sales tax subsidy - capital receipt - grant of depreciation on the reduced value of fixed assets - Held that:- In the present case, undisputedly and admittedly the AO accepted the treatment given by the assessee to the sales tax subsidy as capital receipt in A.Ys 2005-06 and 2006-07 and for A.Ys 2007-08 and 2008-09. AO has not brought out any allegation or facts to allege that that the income does not reflect true factual income of the assessee. In this situation, we are inclined to hold that the authorities below flaunted the Rule of consistency without any justified cause or basis and in view of the proposition laid down by the Hon'ble Supreme Court in the case of CIT Vs. Woodward [2009 (4) TMI 4 - SUPREME COURT] a system of accounting following by the assessee and accepted by the Revenue during the earlier years, consistency cannot be disturbed without any reasonable cause or justified reasoning.
Addition u/s 14A - Held that:- Disallowance can be made in the situation when no exempt income was earned by the assessee in the relevant A.Y and since in the present case the AO as well as the ld. CIT(A) has not brought out any allegation or fact to allege or disturb or doubt the genuinety of the expenditure incurred by the assessee, therefore, no disallowance can be made u/s 14A of the Act in A.Y 2007-08 u/s 14A r.w.r 8D of the Rules for A.Y 2008-09. Respectfully following the decision of the Hon'ble High Court of Delhi in the case of Chem Invest Ltd [2009 (8) TMI 126 - ITAT DELHI-B]
Depreciation on computer peripherals at an estimated basis - Held that:- Depreciation of computers peripherals is available @ 60%, Relying on the lead case being CIT Vs. BSES Yamuna Power [2010 (8) TMI 58 - DELHI HIGH COURT]
Adhoc disallowance @ 10% out of foreign travelling expenses - Held that:- When the assessee went in first appeal, the ld. CIT(A) relying upon the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Kulwant Rai [2007 (2) TMI 185 - DELHI HIGH COURT] deleted the addition by holding that there was no basis to make the addition. Accordingly, finding no merits in the ground of appeal raised by the Revenue,
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2016 (4) TMI 1319
Disallowance made on account of excise duty - Held that:- As decided in assessee’s own case for Asst Year 2006-07 CIT(A) has not erred and justified in deleting the disallowances made on account of excise duty
Disallowance made on account of shifting expenses - Held that:- We find that the assessee has not constructed or set up any new factory in replacement of an existing one. It is a case where certain machineries have been shifted from an existing factory to another existing factory when the former had been closed down. In order to achieve a synergy of production line, certain assets were dismantled and transferred to an existing plant. Therefore the shifting had not been done to increase the profit earning capacity of the assessee or an enduring benefit of the asset as such - such expenditure cannot be treated as capital expenditure and in these circumstances, the ld.CIT(A) has rightly deleted the addition
Disallowance made on account of software expenses - Held that:- As decided for Asst Years 2003-04 & 2004-05 which had relied on the principle laid down by the by the Special Bench of Delhi Tribunal in the case of Amway India Enterprises [2008 (2) TMI 454 - ITAT DELHI-C] held the use of any ERP package in the case of manufacturer like the assesese-Company is generally for coordinating and rationalizing its functions and business process in order to ensure that the business is carried on more efficiently and effectively and by applying the functional test, the expenditure incurred on ERP package, in our opinion, cannot be treated as capital expenditure as it does not result in creation of any new asset or advantage of enduring nature in the capital field. We, therefore, direct the Assessing Officer to allow the deduction claimed by the assessee on account of expenditure incurred on upgradation of ERP and implementation thereof treating the same as revenue in nature
Disallowance made on account of capital work in progress - Held that:- We hold that the disallowance of interest has been made by the Learned AO merely based on surmise and conjecture. In view of the aforesaid facts and circumstances, we find no infirmity in the order of the Learned CIT -A in deleting addition - Revenue appeal dismissed.
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