|
Advanced Search Options
Case Laws
Showing 141 to 160 of 2041 Records
-
2017 (9) TMI 1906
Exparte assessment order u/s. 144 - Admission of additional evidences - addition on account sundry creditors - HELD THAT:- CIT(A) in his impugned order has deleted the addition of ₹ 1,03,00,000/- made by the AO on account sundry creditors on the basis of additional evidence produced during the appellate proceedings without recording in writing the reasons for the admission of the additional evidence - assessee did not satisfy the conditions as laid down in Rule 46A of the Income Tax Rules and despite that Ld. CIT(A) admitted the additional evidence.
Addition was also deleted by the Ld. CIT(A) on account of low gross profit rate in the absence of production of book of account and bills/ vouchers during the assessment proceedings. In view of aforesaid discussions, we are of the considered view that these additional evidences needs to be examined thoroughly at the level of the AO and alongwith books of accounts and bills/ vouchers etc. Therefore, in the interest of justice, we think it proper to set aside the issues in dispute to the file of the AO to decide the same afresh. Appeal filed by the Revenue stands allowed for statistical purposes.
-
2017 (9) TMI 1905
Deduction u/s.80IB(3)(ii) - whether assessee will lose the benefit of said deduction when it grows into a larger Industry outside the definition of SSI unit? - HELD THAT:- There is no dispute on the fact of SSI status when the assessee was incorporated and when it first claimed deduction u/s.80IB(3)(ii) of the Act in the A.Y. 2003-04.
The sub-section (3) refers to the ‘any particular undertaking’ notified in the Official Gazette and the ‘undertaking’ refers to the Small Scale Industries. The deduction is available for 10 consecutive years beginning with the ‘initial assessment year’ subjected to the fulfillment of the conditions mentioned in clause (i) & (ii) of sub-section (3) of section 80IB.
As decided in M/S ACE MULTI AXES SYSTEMS LTD [2014 (8) TMI 596 - KARNATAKA HIGH COURT] if an SSI in the course of 10 years stabilizes early, makes profits, makes further investments in the business the said growth should not come in the way of its claiming benefit u/s.80IB(3)(ii) for 10 consecutive years from the initial assessment year. In our view, the facts of the present case are in sink with that of the facts of the case of Ace Multi Axes Systems Ltd. (supra) - Decided in favour of assessee.
Gains earned on sale of shares - short term capital gain or business income - Assessee claimed it as capital gains - HELD THAT:- As assessee maintains two separate accounts, i.e., investment account and stock in trade. In the past also, similar dispute exists as the AO treated the short term capital gains income as the Business income of the assessee.
On hearing both the parties and considering the facts, we find that the need of honouring the entries in the books of account. No case is made out for disturbing the claim of the assessee. This is the case where only 55 transactions are involved and separate account for investment is maintained. Therefore, there is a case for applying the Apex Court’s judgement in the case of Gopal Purohit[2010 (11) TMI 222 - SC ORDER]. Therefore, in our view, the order of the CIT(A) is required to be reversed on this issue and in favour of the assessee.
Exemption u/s 14A - Suo moto disallowance by assessee - HELD THAT:- We are of the opinion that it is settled legal proposition that the disallowance u/s.14A read with Rule 8D should not exceed the exempt income. Therefore, we direct the AO to restrict the disallowance to the exempt income of ₹ 1,37,806/- after netting the suo moto disallowance of ₹ 24,508/- discussed above.
Quantum of deduction u/s 80IA - HELD THAT:- Deduction u/s.80IA(4)(iv)(a) of the Act without deducting brought forward loss or unabsorbed depreciation prior to initial year on notional basis.
-
2017 (9) TMI 1904
Maintainability of petition - suppression of material facts - allegation that corporate debtor has faded to bring to notice of the operational creditor an existence of a dispute or a pendency of a suit or arbitration proceedings filed before the service of the demand notice - HELD THAT:- As per submissions of the petitioner's counsel, the date of last invoice was raised on 09.10.2013, therefore the claim is time barred. Further, the petitioner has suppressed the fact of giving reply to the Demand Notice by the respondent which indicates that the affidavit filed by the petitioner is not correct and false. Therefore, it is clear that the petitioner has suppressed the material fact before this Adjudicating Authority.
The petition cannot be admitted due to suppression of material of material fact - petition dismissed.
-
2017 (9) TMI 1903
Estimation of income - Bogus purchases - Information received from Sales tax department that certain parties (called hawala parties) are indulging in providing only accommodation bills without actually supplying the materials - AO estimated at 12.50% of the value of purchases - HELD THAT:- There is merit in the inference drawn by the AO that the assessee could have purchased goods from the grey market and obtained the accommodation bills to account for them. In that case, the AO was justified in estimating the profit element involved in the impugned purchases.
The assessee had declared G.P rate of 14.23% and 15.58% during the years relevant for AY 2009-10 and 2010-11 respepctively. During the year under consideration, the G.P rate has come down to 9.82%, a reduction of almost 6%. The turnover of the assessee has increased from ₹ 246 lakhs in the immediately preceding year to ₹ 426 lakhs. The increase in turnover may be one of the reasons for the fall in G.P, but another possibility is that the assessee might have inflated impugned purchases also. Hence there is no merit in the claim of the assessee. The tax authorities have estimated the profit that would have been made by the assessee on the value of alleged bogus purchases @ 12.50% and same is reasonable - Decided against assessee.
-
2017 (9) TMI 1902
Disallowance of periphery development expenses - expenditure incurred is not related to the business of the assessee is incorrect and bad in law - HELD THAT:- Peripheral expenses is incurred by the assessee as per the notification and the sanctions of the Government to maintain the relationship with people working at mines and adjoining areas.
Peripheral expenses consists of various claims submitted by the ld. AR, which according to us are to be verified and test checked, further on perusal of the assessment order there is no proper findings on the disputed issue, the ld. AR filed written submissions and supported his arguments with the paper book containing details and annexures supporting the claims and judicial decisions. Accordingly, in the interest of substantial justice since the above information was filed and the same was not available with the AO. AO to examine and check the genuineness of claim and pass the order on merits after providing adequate opportunity of hearing to the assessee and remit the disputed issue to the file of AO and allow the grounds of appeal of the assessee for statistical purposes.
Prior period expenditure - Amount was crystallized during the year, adding back the expenditure on the ground of not having been accounted on mercantile system is bad in law - HELD THAT:- Assessee in the assessment proceedings could not substantiate the claim with proper explanations and evidence, therefore, in the interest of substantial justice, we provide one more opportunity as prayed by the ld. AR to represent its case before the AO with the evidences/documents of prior period expenses and the AO shall examine the genuineness and crystallisation of the expenses in the financial year and assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. Accordingly, we restore the disputed issue to the file of AO and allow the grounds of appeal of the assessee for statistical purposes.
-
2017 (9) TMI 1901
Levy of transit fee on Minerals - levy by three States, i.e., State of Uttar Pradesh, State of Uttarakhand and State of Madhya Pradesh - HELD THAT:- The High Court has rejected the submission of the writ Petitioners, holding that both 1927 Act and 1957 Act operate into different spheres. The High Court further held that Rule framed by the State Under Section 41 of the Act, 1927 i.e. Rule 5 of Rules, 2000 is valid. Various submissions of the writ Petitioners reiterated before us on the basis of Act, 1957 and Rules framed thereunder including Section 4 (1A) and Section 23C of Act, 1957 have already been considered by us, while considering the submission raised with regard to Civil Appeals arising from the judgment of the Allahabad High Court. The above submission having already noted and considered, it needs no repetition here. Hence, submission raised by learned Counsel for the writ Petitioners on the basis of Act, 1957 is thus rejected.
Now, we come to the reason on the basis of which Division Bench of the High Court has allowed the Writ Petition by quashing the Notification dated 28.05.2001. The High Court held that the Notification dated 28.05.2001 is contrary to the provisions of Section 41 of the Act, 1927 and the notification transgresses Rule 5 of Rules, 2000 because Rule 5 provides that State Government or an authorised officer by it, from time to time, shall fix the rate of the fee for issue of Transit Pass. The fee is to be issued for issue of Transit Pass and Transit Pass by no stretch of imagination can have any nexus with unit of minerals. Thus in fact, it is a fee pertaining to the minerals and not a fee issued on Transit Pass.
Whether the view of the High Court, holding that State could not have asked for payment of fee on Forest Produce on the basis of quantity/volume of the Forest Produce is correct ? We revert back to provision of Section 41 of the Act, 1927. Section 41 empowers the State to make Rules to regulate the transit of Forest Produce. The Rules thus can very well regulate the transit of the Forest Produce. Sub-Section 2 of Section 41 provides that "in particular and without prejudice to the generality of the foregoing provision such Rules may, (c) provide for the issue, production and return of such passes and for the payment of fees therefore."
The power given to State is to regulate the transit of all timber and other Forest Produce and the Rules may provide for issue of passes and for the payment of fees, therefore, fee for issue of the passes has correlation with the Forest Produce which is clear from the scheme of Rules, 2000. According to Rule 3 no Forest Produce shall move into or outside or within the State of Madhya Pradesh except in the manner as provided without a Transit Pass in Form A, B and C. The Forms of Transit Pass are part of the rules.
When the State is empowered to fix rates of fee, it can very well fix the fee on the quantity of Forest Produce. High Court having upheld both Section 41 of the Act, 1927 as well as Rule 5 of Rules, 2000, we see no reason as to how the notification issued under Rule 5 can be held to be beyond the powers of the State - When the State is empowered to fix the rate of fee, it has latitude under the statute to adopt a basis, for fixation of rates of fee. It cannot be said that under the statute fee can be charged only to meet the expenses which are incurred for printing or preparation of passes. The High Court has taken a incorrect view of the matter while coming to the conclusion that Notification dated 28.5.2001 is beyond the power of the State under Rule 5 of Rules, 2000. Rule 5 clearly empowers the State to fix the rate of fee and the rate of fee can be fixed on the basis of quantity/volume of the Forest Produce.
The view that the High Court committed error in setting aside the Notification dated 28.05.2001.
Also, 1927 Act and 1957 Act operate in different fields. State has power to regulate transit of forest produce Under Section 41 of 1927 Act and the Regulation of minerals and effect of transit Rules framed by the State is only incidental on the regulatory control on the mineral as exercised under 1957 Act. The above observations of the Division Bench thus cannot be approved - High Court committed error in quashing the order dated 28.05.2001.
Petition dismissed.
-
2017 (9) TMI 1900
Application for vacating/modification of the order dated 04.09.2017 - restoration of Management of respondent No.3 – Jaypee Infratech Ltd. - HELD THAT:- Having heard learned counsel for the parties at length, in modification of the order dated 04.09.2017, we issue the following directions:
a) The IRP shall forthwith take over the Management of JIL. The IRP shall formulate and submit an Interim Resolution Plan within 45 days before this Court. The Interim Resolution Plan shall make all necessary provisions to protect the interests of the home buyers;
b) Mr.Shekhar Naphade, learned senior counsel along with Ms.Shubhangi Tuli, Advocate-on-Record, shall participate in the meetings of the Committee of Creditors under Section 21 of the Insolvency and Bankruptcy Code, 2016 to espouse the cause of the home buyers and protect their interests;
c) The Managing Director and the Directors of JIL and JAL shall not leave India without the prior permission of this Court;
d) JAL which is not a party to the insolvency proceedings, shall deposit a sum of ₹ 2,000 crores(Rupees two thousand crores) before this Court on or before 27.10.2017. For the said purpose, if any assets or property of JAL have to be sold, that should be done after obtaining prior approval of this Court. Any person who was a Director or Managing Director of JIL or JAL on the date of the institution of the insolvency proceedings against JIL as well as the present Directors/Managing Director shall also not leave the country without prior permission of this Court. The foregoing restraint shall not apply to nominee Directors of lending institutions (IDBI/ICICI/SBI);
e) All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management.
The matter be listed at 2.00 P.M. on 13.11.2017.
-
2017 (9) TMI 1899
Restraint on respondent no.3 from making any payment pursuant to the request for invocation of the bank guarantee - HELD THAT:- In view of the rival submissions, it is required to be stated that normally the Court would declined to interfere with the invocation of the bank guarantee or the performance guarantee as it has been settled law that the Court should decline interference with the invocation of the bank guarantee except on limited grounds. However, the Law declared and observation made has reference to ordinary commercial transaction and performance guarantee. In the facts of the case, subsequent application of the Insolvency and Bankruptcy Code, 2016 will have to be considered, which provides for a separate procedure in case of such Company, which is under resolution process.
Notice to the respondents returnable on 5 October, 2017.
-
2017 (9) TMI 1898
Revision u/s 263 - whether the legality or validly to the original order passed u/s 153C can be challenged by the assessee in this appeal contesting the exercise of revision jurisdiction u/s 263? - HELD THAT:- As now settled proposition of law that in a case where the AO of the searched person as well as that other person, in case of whom the assessment u/s 153C is contemplated, is one and the same the satisfaction would have to be recorded separately qua the searched person.
Even assuming that no handing over of documents is required, recording of satisfaction is a must, as, that is the foundation, upon which subsequent proceedings against other person are initiated. The handing over of documents etc. in such a case may or may not be of much relevance but the recording of satisfaction is still required and in fact is mandatory.
As been categorically held so in the CBDT circular No. 24/2015 (supra). Even the CBDT has directed the concerned officers that pending litigation with regard to recording of satisfaction note u/s 158BD/under section 153C should be withdrawn/not pressed, if it does not meet the guidelines laid down by the Apex Court. The circular of the Board, though is not binding on this Tribunal but same is binding on the department.
In view of the CBDT Circular No. 24 of 2015 we have no hesitation to hold that because of the legal proposition laid down by the various courts and in the light of CBDT circular, the very assuming of jurisdiction and initiation of assessment proceedings in the case of the assessee under section 153C of the Act was bad in law and subsequent assessment order passed u/s 153C is null and void and is to be treated as nonest in the eyes of law. Since the base order passed u/s 153C of the Act has been held to be null and void, the subsequent revision order passed by the CIT u/s 263 of the Act is also accordingly held to be void. The assessee therefore, succeeds on the legal issue. - Decided in favour of assessee.
-
2017 (9) TMI 1897
Accrual of income - system of accounting - addition made an account of Interest accrued on Non-performing Assets (NPA) - assessee is a district central co-operative bank formed under the Karnataka Cooperative Societies Act - HELD THAT:- There is no basis for reclassification of NPAs into highly sticky and sticky loans once the assessee has treated the loan in the category of NPAs as per the RBI Guidelines then the interest on these NPAs cannot be treated as income of the assessee. We further note that for the Assessment Year 2010-11 the CIT (Appeals) allowed full claim of the assessee without any reclassification.
Mere nomenclature adopted with reference to the bad loans and advances receivable, would refer to all non-performing assets of any nature, of whatever category it was placed as a non-performing asset and therefore, the decision of this court in Canfin Homes Ltd.'s case [2011 (8) TMI 178 - KARNATAKA HIGH COURT] would squarely apply. Accordingly, the above question of law also stands answered. - Decided in favour of assessee.
Disallowance of deduction u/s 36(1)(viia) towards the provisions made in respect of rural branches - AO noted that the assessee has made provision for NPAs and provision for contingent liability debited the same to the profit and loss account - AO disallowed the claim on these both accounts due to the reason that the provision is not an allowable expenditure and claim of deduction @ 10% of aggregate advances made to the rural branches was reflected as the details were not furnished - CIT (Appeals) has partly allowed the claim of the assessee after considering the details of the advances of the rural branches as filed by the assessee - HELD THAT:- In the facts and circumstances of the case when these details were not available before the AO then this issue is set aside to the record of the Assessing Officer for verification of the relevant details. In case the claim of the assessee is found within the allowable deduction of permissible limit of 10% of aggregate average of rural advances, the same shall be allowed.
Interest receivable from Government - Whether CIT (Appeals) is not right in holding that the interest receivable from Government is a capital receipts towards debt waiver - HELD THAT:- Assessee is only an intermediary in receiving the said amount from the central government and passing on the same to the Primary Agriculture Co-operative Societies. The claim of the Primary Agriculture Co-operative Societies was to be forwarded through the assessee and therefore, the waiver amount was also to be routed through the assessee-bank. Hence this is only a contra entry and cannot par take the character of income of the assessee as this amount does not belong to the assessee. The assessee was playing the role to assist the central government in receiving the claim from the Primary Agriculture Co-operative Societies and disbursement of the amount of loan waiver under the scheme of Govt. of India. No error or illegality in the impugned order of the CIT (Appeals)
Addition of provision for contingent liability, which is factually a provision for bad debts only - HELD THAT:- We find that the assessee subsequently revised its claim and computation by adding this amount in the deduction under Section36(1)(vii). However, the authorities did not accept this claim of the assessee. We find that if the claim of the assessee is in the nature of a provision of bad and doubtful debts then the deduction under Section 36(1)(viia) can be considered subject to the verification that the claim would not exceed the permissible limit of 10% of aggregate average rural advances. Accordingly, we set aside this issue to the record of the Assessing Officer to verify the details and then adjudicate the same after affording an opportunity of hearing to the assessee.
-
2017 (9) TMI 1896
Validity of Reopening of assessment - reopening beyond 4 years from the end of the relevant assessment year - Disallowance of speculation loss - speculation loss cannot be set off against normal business loss - HELD THAT:- AO has not mentioned as to what was the failure on the part of the assessee to disclose any material fact fully and truly which was necessary at the time of assessment on the earlier occasion u/s.143(3) - assessee has produced the details with respect to the loss at the time of original assessment.
There is no contrary finding by neither the Ld.AO nor the Ld.CIT(A) that the assessee had concealed these facts at the time of original assessment - Revenue authorities has also not brought out a case that any fresh tangible material has surfaced after the original assessment made U/s.143(3) - Revenue has no jurisdiction to reopen the case of the assessee u/s.147 of the Act which is beyond the period of four years from the end of the relevant assessment year, further the assessee had fully and truly disclosed all materials at the time of original assessment U/s 143(3) - Decided in favour of assessee.
-
2017 (9) TMI 1895
Validity of assessment - non-considering the objections for reopening as well as non issuance of notice u/s 143(2) - HELD THAT:- There should not be any grievance to the assessee.There being due opportunity of hearing has been given to the assessee. Even if there is any lapse on the part of the AO, it is only procedural ir-regularity, the provision of Sec.292BB of the Act takes care of it. More so, in the case of Areva T&D India Ltd. vs. ACIT [2006 (11) TMI 166 - MADRAS HIGH COURT] wherein held that non-considering the objections for reopening as well as non- issuance of notice u/s 143(2) are mere procedural irregularities and will not make the reassessment a nullity in law. Accordingly, this ground of the appeal of the assessee is dismissed.
Opportunity of cross examination of Shri Stephen John not provided to the assessee by the CIT(Appeals) - In the present case, though the statement from Shri Stephen John was recorded in the presence of the assessee’s spouse, an opportunity of cross examination was not at all given to the assessee. If the CIT(Appeals)/AO collects the evidences from the parties during the remand proceedings, the CIT(Appeals)/AO should have given an opportunity of cross examination to the assessee. Hence, in the interest of justice, we are of the opinion that the entire issue to be remitted to the CIT(Appeals) with a direction to give an opportunity of cross examination before deciding the issue.
-
2017 (9) TMI 1894
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Existence of debt and dispute - Operational Debt - HELD THAT:- It is established by the Operational Creditor that the nature of Debt is an "Operational Debt" as defined under section 5(21) of the Definitions under The Code. It has also been established that admittedly there was a "Default" as defined under section 3(12) of The Code on the part of the Corporate Debtor. On the basis of the evidences on record the Petitioner has established that the advance was given against the goods to be supplied and invoices were raised to claim the amount but there was non-payment of Debt on the part of the Corporate Debtor.
The notice sent under Section 8 (2) of the Insolvency and Bankruptcy Code, 2016 and if the Respondent wanted to place on record evidence of 'dispute' then he could have raised the objection within 10 days as prescribed under section 8(2) of The Code which had also lapsed now - As a consequence, after the expiry of the period as prescribed and keeping admitted facts in mind that the Operational Creditor had not received the outstanding Debt from the Corporate Debtor and that the formalities as prescribed under The Code have been completed by the Petitioner we are of the conscientious view that this Petition deserves 'Admission'. Hence, Admitted.
Petition admitted - moratorium declared.
-
2017 (9) TMI 1893
CENVAT Credit - capital goods - plant, structures, embedded to earth - angles, joists, beam, channels, bars, flats which go into fabrication of such structures - HELD THAT:- Section 37 of the Central Excise Act, 1944; for short, 'the Act', is a rule making power. Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods. Section 37 (2A) of the Act – The power to make rules conferred by clause (xvi) of sub-section (2) shall include the power to give retrospective effect to rebate of duties on inputs used in the export goods from a date not earlier than the changes in the rates of duty on such inputs. Though the power to make rules include the power to give retrospective effect, while doing so the provision under consideration is neither made retrospective nor could it be treated as one.
The questions formulated in these appeals in favour of the Assessees and against the Revenue.
-
2017 (9) TMI 1892
Exemption u/s 11 - treating the activities as not being charitable - revenues earned from trade exhibitions, program fees, publication revenue, revenue from use of facilities, advertisement on website video cassettes hiring charges etc. fell under clause a, b and c of proviso of Sec.2(15) - HELD THAT:- We find that as per the Memorandum of Association, the income / profit of the assessee are to be applied solely for the promotion of the objects set forth in its Memorandum and no portion of income of the property can be paid or transferred directly or indirectly by way of dividend, bonus or otherwise by way of profit to any person. Before us, no material has been placed by Revenue to demonstrate that the assessee has in any way distributed or paid bonus or dividends. Further, before us, no material has been placed on record by Revenue to show that the dominant activity of the assessee was trade, business or commerce and the driving force was to earn profit.
We find that Ld.CIT(A) while deciding the issue has given a finding that the activities undertaken by the assessee seen with reference to the dominant activity of the Trust shows that it has been carried out for the advancement of the dominant object of the Trust and the fees generation is only incidental to the activities carried out by the assessee and are not hit at all by the proviso to Sec.2(15) of the Act. Before us, Revenue has not placed any material on record to controvert the findings of Ld.CIT(A). Inview of the aforesaid facts, we find no reason to interfere with the order of Ld.CIT(A) and thus the grounds of Revenue are dismissed.
-
2017 (9) TMI 1891
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As decided in assessee's own case for assessment year 2009-10 VERSA [2016 (7) TMI 1582 - ITAT CHENNAI] AO has to consider the assessee’s own fund i.e. capital and reserves as available for investment which yields exempted income and thereafter he shall apply the Formula in Rule 8D and also exclude investments in subsidiaries as held by the above order of Co-ordinate Bench. With this observation, we remit the issue to the file of AO for fresh consideration. Hence, this ground is allowed for statistical purposes
-
2017 (9) TMI 1890
TP Adjustment - comparable selection - CIT- A accepting Brescon Corporate Advisors Ltd. (“Brescon”) as a comparable to the appellant by holding that the activities performed by Brescon are similar to the activities performed by the appellant - TPO has accepted TNMM as the most appropriate method for benchmarking the international transactions - HELD THAT:- As decided in own case [2017 (2) TMI 1389 - ITAT DELHI] we are of the considered view that Brescon Corporate Advisors Ltd. introduced by the TPO and retained by ld. CIT (A) in the final list of comparables is not a suitable comparable, hence ordered to be excluded from the list of comparables.
Integrated Enterprises India Limited - We are of the considered view that when a specific prayer has been made by the assessee to admit additional evidences in the form of financial data which was not available in the public domain during the TP proceedings before TPO, it was imperative on the part of ld. CIT (A) to pass an order on the application for additional evidence and to examine the suitability of comparable sought to be included by the assessee for benchmarking its international transaction. We set aside this issue to the ld. CIT (A) to decide afresh the suitability of the comparability of the Integrated Enterprises India Limited after allowing the application for additional evidence - additional ground is determined in favour of the assessee.
Bonus paid to the employees by invoking provisions contained u/s 36(1)(ii) - HELD THAT:- As decided in own case [2017 (2) TMI 1389 - ITAT DELHI] deduction u/s 36(1)(ii) in respect of payment of bonus to the aforesaid shareholder/Director who are also major shareholder in the company with 50% shareholding of each is allowable deduction as there is no change in the shareholding pattern during the year under assessment - Decided in favour of the assessee.
M/s. Keynote Corporate Services Ltd. - Only the shareholding pattern of M/s. Keynote Corporate Services Ltd. is changed with amalgamation which has not affected the profit. However, this contention is not tenable in the face of uncontroverted fact that the profit margin of assessee company has raised up to 145% during the year under assessment which is extremely volatile and abnormal and is due to the amalgamation and merger. Moreover, launch of ESOP Division which focused on designing and implementing stock option scheme for corporate, the business model of comparable company has undergone a change. So, we are of the considered view that the ld. CIT (A) has rightly excluded M/s. Keynote Corporate Services Ltd. as unsuitable comparable.
-
2017 (9) TMI 1889
Deduction u/s 10B in respect of management fee - contention of the assessee is that the management fee is part of export profit, therefore, eligible for deduction u/s 10B - whether management fee, which is in relation to export of valves, cannot be reduced from profit of the undertaking? - HELD THAT:- Claim is only in respect of management fee. The management fee is in connection with export of valves, therefore, in view of the judgment of Delhi High Court in Priviera Home Furnishing [2015 (11) TMI 1139 - DELHI HIGH COURT] this Tribunal is of the considered opinion that the assessee is eligible for deduction under Section 10B of the Act.
The management fee for the assessment years 2009-10 and 2010-11 respectively are eligible for deduction under Section 10B of the Act. Therefore, we are unable to uphold the orders of the lower authorities. Accordingly, the orders of both the authorities below are set aside and the Assessing Officer is directed to allow the claim of the assessee in respect of management fee under Section 10B - Appeals filed by the assessee are allowed.
-
2017 (9) TMI 1888
Remission or cessation of liability u/s.41(1) - discount received on pre-payment of deferred "Sales Tax Loan' - HELD THAT:- CIT(A) heavily relied on the Special Bench decision in the case of Sulzer India Ltd [2010 (11) TMI 728 - ITAT, MUMBAI]. Further, he demonstrated that the said decision of the Special Bench of the Tribunal was subsequently confirmed by the jurisdictional High Court of Bombay in the case of CIT Vs. Sulzer India Ltd. r [2014 (12) TMI 267 - BOMBAY HIGH COURT] - no contrary judgment was cited by the Revenue - decision of CIT-A confirmed - Decided against revenue.
Disallowance u/s 14A - CIT- A confirmed allocating notionally the expenditure for earning Exempt income - assessee said he has excess interest free funds which should be presumed to have been invested in the exempt income, in which case there is no need for disallowance of interest u/s.14A r.w. Rule 8D and relied on the decision of HDFC Bank [2016 (3) TMI 755 - BOMBAY HIGH COURT] - HELD THAT:- It is in the interest of justice for both the parties that the issues relating to disallowance of expenditure u/s.14A r.w. Rule 8D(2) of the I.T. Rules, 1962, should be remanded to the file of the AO for fresh adjudication applying the said ratios of the judgments. AO shall grant reasonable opportunity to the assessee at the time of re-adjudication of the issues. Ground allowed for statistical purposes.
Disallowance of share issue expenses - HELD THAT:- We find this issue has already been adjudicated by the Tribunal against the assessee in the own case for A.Y. 2006-07 [2012 (8) TMI 230 - ITAT PUNE] While deciding, Tribunal relied on the decision of Hon'ble Supreme Court in the case of Brook Bond India Ltd. [1997 (2) TMI 11 - SUPREME COURT].
Disallowance of income - difference between receipts as per online ITS data and receipt as per books - HELD THAT:- We find there is merit in the counsel's submission that the AO should examine each and every item of income/receipt which figures in the Form 26AS but not accounted as income of the assessee in the year under consideration. He should examine each and every such item and pass a speaking order after granting reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice. Accordingly, this part of the ground is allowed for statistical purposes.
Disallowance of carbon credit expenses - assessee submitted that the Tribunal may consider reducing the sale price of the windmill to the extent of said ₹ 5 lakhs as the liability is on the assessee to incur the said amount - HELD THAT:- This argument is raised for the first time with an implication on the W.D.V. of the asset in the hands of the buyer of the asset. After hearing both the sides, we find it relevant to remand this issue to the file of the AO for fresh adjudication considering the aforesaid new argument raised by the Ld. Counsel for the assessee. Ground raised by the assessee is accordingly allowed for statistical purposes.
Claim of deduction u/s.80IA(4) - Assessee demonstrated that the said claim of the assessee may now becomes infructuous in the light of the likely deletion of various additions, of course, if approved by the Tribunal or if no additions are repeated by the AO as a result of remand proceedings, if any, as directed by the Tribunal in this composite order - HELD THAT:- We are of the considered opinion that it is certain that some of the additions are likely to be deleted or reduced in the remand proceedings as ordered above. The cited decisions would help the assessee. For example - we have now statistically allowed the issue relating to disallowance u/s.14A r.w. Rule 8D of the I.T. Rules, 1962. There are certain other additions which are remanded for fresh adjudication by the AO. In a way, this ground becomes consequential to the findings of the AO in the remand proceedings. Therefore, we are of the opinion that, for the time being, this ground should be dismissed as infructuous. However, we direct the AO to consider the claim of the assessee, in case of positive profits, if any, at the end of the remand proceedings.
Disallowance of IPO expenditure - HELD THAT:- As relying on Nimbus Communication [2011 (12) TMI 696 - BOMBAY HIGH COURT] IPO expenditure incurred in connection with issue of share. The initial public offer constitutes an allowable Revenue expenditure.
Disallowance of claim u/s.80IA(4) - As per assesseeAO has notionally brought forward the losses of earlier years which was already set off against the profits of the earlier years by invoking the provisions of section 80IA(5) of the Act - HELD THAT:- As such treatment is not appreciated by the Tribunal in the case of Serum International Ltd. [2013 (1) TMI 688 - ITAT PUNE] and said decision of the Tribunal is in tune with the subsequent circular issued by the CBDT vide Circular No.01/2016 dated 01-05-2016. Considering the same, the CIT(A) granted relief to the assessee which is fair and reasonable. - Decided against revenue.
-
2017 (9) TMI 1887
Bogus purchases - addition restricted by CIT(A) being 25% of total non-genuine bogus purchases - Payment towards VAT on the purchases from hawala dealers made - as submitted by assessee disallowance made by Assessing Officer is inclusive of VAT and further the credit of VAT was denied by the sales tax department and raised a demand which was recovered from the assessee - HELD THAT:- Merit in the submission of the ld.AR that the sustenance of 25% of bogus purchases is excessive and unreasonable particularly when the VAT credit was not allowed to the assessee by the sales tax department and demand of VAT on behalf of hawala suppliers was realized from the assessee.
If we look at the gross profit disclosed by the assessee, it is 16.78 % which is much more than the disallowance @ 11.50% which is normally made by the coordinate benches in the case of hawala purchases. But to discourage the practice of bogus trading some deterrent has to be there. I
Ends of justice would be met if the addition is sustained equal to an amount arrived at by calculating 11.50% of bogus purchases minus the VAT credit denied to the assessee by the Sales Tax Deptt which comes to ₹ 6,66,690/- (₹ 31,29,564 minus 24,62,874). Accordingly the AO is directed to delete the additions of ₹ 61,36,710/-. Assessee's appeal is partly allowed.
............
|
9911796707
