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Showing 161 to 180 of 2049 Records
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2018 (3) TMI 1893
Grant of approval u/s 80G(5)(vi) denied - registration u/s 12AA approved - HELD THAT:- It is seen that registration u/s 12AA(1)(b)(i) was granted to the appellant Institution vide order dated 05.04.2016 (APB, 16-18). It is not disputed that this registration has hitherto not been revoked or cancelled. CIT(E) has observed, interalia, that approval u/s 80G(5) of the Act is not a mechanical process, wherein the according of registration u/s 12AA of the Act at one end would result in the issuance of approval u/s 80G(5) at the other. Consistent judicial opinion in this regard, however, otherwise. The issue is, as such, res integra.
CIT(E) was not justified in rejecting, on the very same date as that of the hearing, clearly in direct contravention of “Velu Palandar” [1971 (8) TMI 42 - MADRAS HIGH COURT] the appellant’s application seeking grant of approval u/s 80G(5)(vi) of the Act, despite the undisputed fact that the applicant was granted registration u/s 12AA of the Act and that too, by he himself, on examining the Institution’s objects and the genuineness of its activities, and such registration continues uninterrupted hitherto, and inspite of the fact that it remains undisputed that the appellant duly fulfils all the conditions prescribed u/s 80G(5)(i) to (v) of the Act.
Accordingly, the order under appeal is reversed and it is directed that the appellant be granted approval u/s 80G of the Act forthwith.
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2018 (3) TMI 1892
Winding up of Respondent Company - failure to comply with section 9 of IBC - non-compliance with Section 9(5)(ii)(a) of IBC - HELD THAT:- In pursuance to transfer of the case to this Tribunal, the Petitioner is required to comply with the provisions of Section 9(3)(a) to (c) of IBC. Hon'ble NCLAT has consistently held including the one rendered in Company Appeal Uttam Galva steel limited v. GF Feutsche Fortair AG [2017 (8) TMI 1198 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELH], that all the provisions are mandatorily required to be complied with by the Operational Creditor in order to maintain the petition before this Tribunal against the Corporate Debtor under the provisions of IBC, 2016. In view of lack of compliance of the mandatory provisions.
As stated by the respondents that it is not insolvent Company and it is earn profits earned profit for the year 2017. The amount claimed by the petitioner also clearly disputed by the respondents. The amounts claimed is ₹ 68,94,997/- are inflated invoices raised by the Petitioner, of which the Liquidated Damages payable by the Petitioner amounting to ₹ 12,75,850/- inflated billing in the invoices raised by the Petitioner amounting to ₹ 15,59,341/- and an amount of ₹ 40,59,806/- was deducted and adjusted as a result of breach of contract and no amount is due or payable to petitioner. Therefore, it is clear case of disputes the Adjudicating Authority cannot enter into roving enquiry when the amount is not specific. And also the petitioner has not complied all procedures prescribed under the provisions of IBC, 2016, after transfer the case from the High court of AP.
Therefore, instead of examining several disputed questions with regard to amount in question, and in complying with procedures prescribed under IBC, 2016, after transfer the case from High court, it would be in the interest of justice to dispose of the case, with a liberty to the petitioner to file a fresh in accordance with provisions of IBC, 2016. And it is not a fit case to admit - petition dismissed.
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2018 (3) TMI 1891
Addition u/s 69B - HELD THAT:- Difference in the books of accounts of the assessee and the statement is only due to the fact that the buyers have failed to take the delivery of the shares and therefore the provision of section 69B is not attracted. Therefore, the order of CIT(A) is set aside and AO is directed to delete the addition. The ground No.1 is allowed.
Profit on sale of investments - taxed under the head income from capital gain and income from business - HELD THAT:- In order to maintain consistency with the decision of the Tribunal, we hold that the profit on sale of investments cannot be taxed as the amendment by the Finance Act is effective from A.Y. 2011-12 onwards and not prior to that. The grounds no 1 and 2 raised by the revenue are dismissed.
Disallowance u/s 14A read with rule 8D - HELD THAT:- We find that it has been consistently held that, provision of section 14A is not applicable in the cases of Insurance company which are governed by section 44, because it is non obstante provision wherein the income is to be computed as per P&L account prepared under the Insurance Act 1938. Section 14A contemplates exception for deduction allowable under the act, whereas section 44 creates special application of provision of computation of profit as per the Insurance Act. Thus, no disallowance u/s 14A can be made.
Premium paid on purchase of government securities was allowable as revenue expenditure on amortization - HELD THAT:- As relying on assessee own case [2015 (2) TMI 1323 - ITAT MUMBAI] we hold that such an amortization claimed by the assessee as revenue expenditure is allowable. Accordingly, assessee’s ground no.5 is treated as allowed.
Disallowance u/s 40(a)(ia) - HELD THAT:- CIT(A) allowed the appeal of the assessee by observing that identical issue was decided in the earlier years and same was followed in the current year also. The case is also covered by the decision of Tribunal in the case of General Insurance Corporation of India [2009 (2) TMI 234 - ITAT BOMBAY-G] in which it has been held that the provision qua deduction of TDS at source are not applicable on reinsurance commission and accordingly the order under section 201(1) r.w.s. 201(1A) was set aside - Decided in favour of the assessee.
Premium paid by the assessee on purchase of government securities was allowable as revenue expenditure on amortization.
MAT applicability u/s 115JB - HELD THAT:- Accounts of the insurance company are prepared in accordance with the Insurance Act, 1938 as has been provided under section 44A read with First Schedule and therefore, the provisions of section 115JB do not apply to the assessee’s case. Accordingly, the ground raised by the Revenue is dismissed.
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2018 (3) TMI 1890
Maintainability of appeal - two suits pending is with regard to the money claim - HELD THAT:- We do not accept the submission made on behalf of the appellant as it is clear from the provisions of the law that where a suit or arbitration proceedings is pending between the parties and such matter is brought to the notice of the Adjudicating Authority, the Authority is bound to reject the application.
Appeal dismissed.
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2018 (3) TMI 1889
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - suit between the parties was pending since prior to issuance of demand notice under sub-section (1) of Section 8 of the 'I & B Code' - HELD THAT:- As, admittedly the suit between the parties was pending before the date on which demand notice was issued under sub-section (1) of Section 8 of the 'I & B Code' and was also pending when the application under Section 9 of the 'I & B Code' was admitted, application under section 9 of the 'I & B Code' was not maintainable.
The order dated 30th August, 2017 passed by Adjudicating Authority, Bengaluru Bench is set aside and the appeal is allowed.
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2018 (3) TMI 1888
No show cause notice issued - principle of natural justice denied - HELD THAT:- It would be more appropriate if Respondent Nos.1 and 2 are granted permission to file a statutory appeal before the Securities Appellate Tribunal (SAT) challenging the order dated 23rd July, 2011.
Thirty days' time is granted to the respondents to file an appeal. If the appeal is filed by the respondents within a period of thirty days from today, the Securities Appellate Tribunal will hear the appeal on merits.
In the meanwhile, the interim order passed by this Court will continue to the effect that any proceedings, decision or action taken in pursuance of the order dated 23rd July, 2011 passed by the Forward Markets Commission (now SEBI) shall abide by the final result of the appeal.
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2018 (3) TMI 1887
Transfer petition - HELD THAT:- Learned Additional Solicitor General and the respondent-in-person are fairly agreed that the transfer petitions be allowed and other writ petitions pending, to be transferred to this Court.
After transfer of the above-mentioned cases, the Registry is directed to register them as transferred cases - transfer petition allowed.
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2018 (3) TMI 1886
Grant of Default Bail - Smuggling - alleged possession of 250 gms. of heroine - Section 167(2) proviso (a)(ii) of the Code of Criminal Procedure, 1973 - applicant sought the grant of bail submitting that he had been detained beyond the statutory period of 60 days in terms of Section 167(2) proviso (a)(ii) of the Code of Criminal Procedure, 1973 and sought that he be released on bail and undertook to furnish the required bail bond submitting to the effect that the prosecution had failed to file any charge-sheet against him within the statutory period prescribed - HELD THAT:- It cannot be overlooked in the instant case on 19.09.2017 when the petitioner sought grant of bail the charge-sheet was not filed before the learned Trial Court and the petitioner was admittedly entitled to the grant of benefit in terms of section 167(2) proviso (a)(ii) thereof as the commission of the offence, if proved, is punishable in terms of section 21(b) of the NDPS Act, 1985 with a maximum term of rigorous imprisonment for a period of 10 years and with a fine.
The observations in paragraph 111(28) and paragraph 112 (29) of the concurring judgment in RAKESH KUMAR PAUL VERSUS STATE OF ASSAM [2017 (8) TMI 1526 - SUPREME COURT] categorically spell out that the right to get “default bail” is a very important right and that ours is a country where millions of our countrymen are totally illiterate and are not aware of their rights and that the accused can be detained in custody so long as he does not furnish bail and that the accused is not required to file a detailed application and all he has to aver in the application is that since 60 or 90 days had expired and charge-sheet has not been filed, he is entitled to bail and is willing to furnish bail and that this indefeasible right cannot be defeated by filing the charge-sheet after the accused has offered to furnish bail and did not have any grounds for grant of bail.
It is essential to observe that the petitioner though he filed an application under Section 439 of the Criminal Procedure Code, 1973 and stated inter alia that he had been falsely implicated nevertheless stated that he was in judicial custody since 06.03.2017 and was willing to join the investigation and was willing to produce sound surety as directed by the Court. The application was admittedly filed on 19.09.2017 and was listed for 26.09.2017 and was not taken up on 19.09.2017 - It is thus apparent that the contents of the application dated 19.09.2017 had essentially to be considered by the learned Trial Court and the aspect of the charge-sheet having not been filed till the said date which on completion of 60 days from the date of the arrest of the petitioner / the accused on 03.06.2017 had to be filed by 04.08.2017 ought not to have overlooked. The period of incarceration of the petitioner from the date 19.09.2017 when he sought the grant of bail implicitly also on the ground that he was arrested on 03.06.2017 and was willing to continue to join the investigation, indicating thereby that the investigation was not complete and did not set completed till submission of the charge-sheet on 20.09.2017 cannot be overlooked and thus cannot extinguish the indefeasible right of “default bail” to the petitioner.
The petitioner is thus directed to be released on bail on submission of a bail bond for a sum of ₹ 50,000/- with one surety of the like amount subject to the satisfaction of the learned Trial Court and subject to the conditions that he shall not leave the country without permission of the learned Trial Court and he shall appear before the learned Trial Court as and when directed and shall submit his present address on an affidavit before the learned Trial Court - Petition allowed.
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2018 (3) TMI 1885
Withdrawal of investments made - Clause-F of the notification dated 21-1-2004 - writ petition is preferred with the grievance that in spite of the petitioner being entitled to remove the capital investment in plants and machineries under Clause-F of the notification dated 21-1-2004, the respondent authorities are not allowing the petitioner to do so - HELD THAT:- None of the three methods provided under Section 11 of the Central Excise Act, 1944 empowers the department to attach any property of an assessee/person on the ground that such person or assessee may be liable to pay the department any amount towards meeting the dues under the Central Excise Act or the Rules framed thereunder. In the absence of such power, this Court cannot concur with the stand taken by the respondent authorities in paragraph-8 of the affidavit in opposition that in exercise of power under Section 11 of the Central Excise Act, 1944, the plants and machineries of the petitioner are being attached for the purpose of meeting the dues that may be due from the petitioner in respect of such cases mentioned therein, which are pending before the Hon’ble Supreme Court of India or before the CESTAT, Kolkata.
The conduct of the Excise Department in not allowing the petitioner to remove the plants and machineries is found to be contrary to the powers conferred under Section 11 of the Central Excise Act, 1944 and this Court is of the view that the respondent Excise Department cannot attach any other property of the petitioner other than any excisable goods and also cannot restrain the petitioner from lifting the plants and machineries involved in the present writ petition by taking recourse of Section 11 of the Central Excise Act, 1944.
The appropriate authority in the Central Excise Department shall not prohibit the petitioner from lifting and taking away the concerned properties by exercising their power under Section 11 of the Central Excise Act, 1944 - Petition disposed off.
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2018 (3) TMI 1884
Whether abatement of duty element from FOB price of iron ore, which is being exported by the appellant, is to be allowed for determining the transaction value for the purpose of assessment of export duty by treating FOB price of the goods as cum-duty price?
HELD THAT:- It has been brought to our notice by the Learned AR that the issue stand decided in the same assessee’s case reported as Sesa Goa Ltd. v. CC [2010 (8) TMI 747 - CESTAT, MUMBAI]. It stand held by the Tribunal that FOB price of the goods is the price actually paid or payable by the importer to the exporter in respect of the goods exported and the assessable value cannot be brought down by extending the benefit of cum-duty price.
Appeal dismissed - decided against appellant.
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2018 (3) TMI 1883
Genuineness of transaction with that of broker of MCX Stock Exchange - CIT-A found satisfied that the assessee filed all the required details and documents in support of the transactions entered into by it in respect of foreign exchange derivatives - statement recorded during the search & seizure operation - Whether CIT-A is justified in deleting the addition made by the AO by accepting new evidence under Rule 46A of the IT Rules 1962? - HELD THAT:- CIT-A found satisfied that the assessee filed all the required details and documents in support of the transactions entered into by it in respect of foreign exchange derivatives. AO made the addition only on the basis of statement recorded during the search & seizure operation in the premises of the said Shri Sachet Saraf, director of M/s. Marigold Vanijya P.Ltd. The said statement of Mr. Saraf was retracted at a later point of time.
CIT-A found satisfied that there was no corroborative evidence which supports the view of the AO that the said transaction was unexplained. No additional evidence, which was filed before the CIT-A, but not before the AO. CIT-A deleted the said addition only on the basis of material/evidence available on record, which were very much before the AO in the re-assessment proceedings. The case laws as relied on by the assessee before the CIT-A were relevant and applicable to the present facts of the case. CIT-A has discussed the each case law thoroughly. CIT-A was justified in deleting the addition made by the AO on this issue. The grounds raised by the revenue in the appeal are dismissed.
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2018 (3) TMI 1882
Disallowance of CENVAT credit - procured capital goods from M/s. Inox Air Products Ltd. but retained the same in that condition in their factory in order to obtain a higher refund under N/N. 32/99-CE dated-8th July 1999 - HELD THAT:- It is not in dispute that the goods have been procured on long term basis and the CENVAT Credit has been taken subsequently after assembling on the same invoices against which the goods were procured. From this it is clear that capital goods were delivered and received in the factory of the appellant in 2007-2008. While usage within the factory may well be a term use in the definition of Rule 3 of CENVAT credit Rules, 2004 which authorises the availment of credit specified and received in the factory. Accordingly, we hold that the eligibility for CENVAT Credit arises in 2007-2008 and these being capital goods, credit should have been availed in 2007-2008 and 2008-2009 - the refund amount of Rs. ₹ 15,95,332/- claimed during these two years was in excess of their entitlement and hence recovery thereof cannot be faulted.
As far as the subsequent availment of CENVAT Credit is concerned, without findings of any eligibility for the excess amount claimed and refund arising from deferment of availment of credit, we hold that the entitlement of CENVAT Credit is not deniable. For this reason, recovery of that amount is not correct in law.
The appeal of M/s. Premier Cryogenics Ltd. is allowed to the extent of setting aside the demand of Rs. ₹ 22,93,920/- while upholding the recovery of Rs. ₹ 15,95,332/- - Appeal allowed in part.
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2018 (3) TMI 1881
TP Adjustment - upward adjustment in relation to assessee’s international transaction of software services distributed by UK based associated enterprises “Mastek UK (MUK)” - HELD THAT:- As relying on assessee's own case [2012 (5) TMI 206 - ITAT AHMEDABAD] it is held that the operations of MUK can be characterized as distributor and accordingly the approach adopted by the TPO is set aside as it was not justified. The upward adjustment made by the TPO is accordingly directed to be deleted.
Upward ALP adjustment relating to assessee’s international transaction of provisions of Information Technology Enabled Services (ITES) - Comparable selection - HELD THAT:- CIT(A) has recomputed assessee’s arm’s length margin after excluding two entities M/s. Accentia Technologies Limited and M/s. Cross Domain Solutions Limited - these very entities are not to be taken as comparables since the former one underwent extra ordinary merger event whereas the latter entity provided high-end KPO services. We observe in view of all these developments that the CIT(A) has rightly deleted the impugned adjustment after excluding the above two comparable entities from the array of comparables. The Revenue fails in its instant substantive ground as well.
Upward adjustment on fee for performance guarantee from 2% to 0.11% as proposed in the transfer pricing officer’s order - International transaction u/s 92B - HELD THAT:- We find that recent co-ordinate bench in M/s Suzlon Energy Ltd. vs. ACIT [2017 (4) TMI 1406 - ITAT AHMEDABAD] holds that such a guarantee does not amount to an international transaction under section 92B.
TPO had himself taken financial guarantees given by various institutions as the relevant bench mark for the performance guarantee adjustment in question. assessee extending corporate guarantees to its AEs, particularly on the facts and in the circumstances of this case and when the assessee has done so in the course of its stewardship activities for its subsidiaries, does not constitute an international transaction, and, as such, no ALP adjustment can be made in respect of the same. Accordingly, entire ALP adjustment stands deleted.
Upward adjustment to human resource management services - HELD THAT:- As decided in own case [2012 (5) TMI 206 - ITAT AHMEDABAD] figures have revealed that following the said business strategy the business growth as a whole was much higher than the impugned compensation amount. This allegation is also to be ruled out that those very employees were otherwise regular employees of the assessee-company and they have been absorbed after their return for the period for which they were sent abroad and worked "offshore" with AEs. It is true that such employees are the regular group of experts but they have been paid by AEs when worked on-site abroad, which means the burden of salary for the "offshore" period was in fact borne by AEs, otherwise to maintain bunch of trained employees the MIL had to incur the expenditure on salary - secondee-provider is not akin to recruitment service-provider or that "secondment" is different from "recruitment". Finally, we hold that there was no legal basis for the impugned upward adjustment and the same is hereby directed to be deleted. This ground is allowed.
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2018 (3) TMI 1880
Disallowance u/s.40A(3) - whether the assessee is entitled for exemption under Rule 6DD in respect of all the payments or any of the payments made in cash? - HELD THAT:- Genuineness of the payment and the identity of the payee are not disputed. The assessee pleads that it was compelled to pay cash owing to the insistence of its principal and if it had not abided by the direction, its business would have suffered involved in trying to revive the sick company in the role of ‘Co-Promotor’ and in the process salvage the huge investment already made in M/s. Sitalakshmi Mills Ltd.
In the best interest of the assessee to ensure that M/s. Sitalakshmi Mills Ltd was deregistered from BIFR. This was finally achieved when the Hon’ble Madurai bench of the Madras High Court ordered so, also with a word of appreciation for your humble assessee. Cash payments were made with the whole objective and primarily to protect the business interests of the assessee whose funds were locked up and due from M/s. Sitalakshmi Mills Ltd.
These actions clearly fall within the scope of considerations of business expediency and other relevant factors as mentioned in the provisions itself (in the second proviso). The assessee is also right in its pleading that these aspects are to be judged from the point of prudent businessman. Thus, on the facts and on relying the purposive interpretation of ATTAR SINGH GURMUKH SINGH [1991 (8) TMI 5 - SUPREME COURT] the assessee has clearly made out a case in its favour and hence, we allow the assessee’s appeal.
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2018 (3) TMI 1879
Validity of reopening of the assessment - Order u/s 143(3) passed in the name of a non-existent entity - HELD THAT:- In the present case, it is evident that the assessment order, notice of demand, confirmation and penalty notices are also in the name of the entity which does not exist as on that date. Accordingly, in view of the above settled position of law, hold that the reassessment proceedings and the assessment order passed in consequence thereto is bad in law and the same is quashed.
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2018 (3) TMI 1878
Exemption u/s 54 - purchase of a residential house within one year before or two years after from the date of transfer or construction of a residential house within three years from the date of transfer - HELD THAT:- It is clear that on the date when assessee entered into the agreement, the construction had only commenced. The agreement was for construction of the flat and giving it to the assessee in a built up condition. It was not the purchase of an already built residential house.
Once the payments were for construction, only the amounts paid by the assessee within a period of three years from the date of transfer of asset, giving rise to the capital gains could be considered for deduction u/s.54 of the Act. The date of transfer of the asset giving rise to the capital gains was 15th November, 2012 and the payments made by the assessee to M/s. Aarthik Properties Limited after the said date was ₹ 5,00,000/- only. We are therefore of the opinion that lower authorities were justified in restricting the claim u/s.54 of the Act to the amounts paid by the assessee after 15.11.2012.
Computation of capital gains - application of Section 50C - disallowance of claim for improvement - HELD THAT:- Assessing Officer is left with no choice but to consider the full value of consideration at the amount fixed by the DVO, if it is lower than what has been fixed for stamp duty. We cannot find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals) on this issue also. As for the claim for improvement expenses assessee himself had withdrawn the ground assailing disallowance of improvement expenses. We thus do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals). Appeal of the assessee stands dismissed.
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2018 (3) TMI 1877
Deduction u/s.80IB for the two blocks - partial completion of the project - HELD THAT:- There is no provision in the Act to prevent the appellant for claiming deduction U/s.80IB(10) of the Act depending on the partial completion of the project. Therefore the Ld.CIT(A) has granted deduction of 80IB(10) for the 2 completed blocks of constructed dwelling units because the assessee had complied with the other provisions of the Act. No infirmity in the order of the Ld.CIT(A) because we are also of the view that as stated by the Ld.CIT(A) there is no prohibition in the Act to claim deduction depending on the completion of the project when all other conditions are fulfilled. Therefore on this regard we uphold the decision of the Ld.CIT(A).
Size of the land - CIT(A) after examining the matter has accepted the contention of the Ld.AR, that the extent of land is 3.46 acres on which 5 blocks are constructed. Considering the total number of residential units and various survey numbers cited in the approval it is obvious that the size of the land is more than 1 acre with respect to the two blocks thereby complying with one of the provisions of Section 80IB(10) of the Act. Hence we do not find it necessary to interfere with the order of the Ld.CIT(A) on this issue.
Built-up area of the flats - CIT(A) has held that in the case of the assessee the built-up area includes certain common area which is required to be excluded while considering the compliance of provision of 80IB(10)(c) - on examining the materials on record CIT(A) has arrived at the conclusion that in the case of the assessee all the residential units are within the permissible limit of 1500 per sq.ft., after excluding the common area and therefore eligible for deduction U/s.80IB(10) - Since the assessee had complied with all the conditions stipulated U/s.80IB(10) CIT(A) granted deduction for the 2 blocks of the constructed residential units. In this situation, we do not find it necessary to interfere with the order of the Ld.CIT(A) who has arrived at such decision after examining the materials produced before him.
We hereby sustain the order of the Ld.CIT(A) for granting deduction U/s.80IB(10) of the Act to the assessee with respect to the 2 blocks of constructed residential units. Hence the Revenue’s appeal is devoid of merits.
Tribunal powers to admit any fresh legal ground raised by any of the party in the appeal for the first time - assessee has raised the additional ground that it is eligible for claiming deduction U/s.80IB(10) of the Act for the entire project because the entire project was completed before the financial year ending 31.03.2012 - HELD THAT:- On perusing the materials on record we find that the assessee has a valid legal ground, hence we are of the considered view that even though the assessee has raised this legal ground before us for the first time, in the interest of justice, it is required to be admitted for adjudication in accordance with the provisions of the Act and the decisions rendered by various judicial authorities. Accordingly we hereby admit this legal ground raised by the assessee and remit the matter to the file of Ld.AO for de-nova consideration. Further we hereby direct the Ld.AO to treat the date of completion of the entire project as 23.02.2012 even though the final completion certificate is dated 14.05.2012 because the application for the final completion certificate was made on 23.02.2012. Reliance is placed in the decision of CIT vs. HINDUSTAN SAMUH AWAS LTD. [2015 (10) TMI 2306 - BOMBAY HIGH COURT] wherein upholding the order of the Tribunal it was held that when the assessee had filed application for granting final completion certificate before the appropriate Authority, the subsequent delay by the appropriate Authority in issuing the completion certificate cannot be attributed to the assessee.
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2018 (3) TMI 1876
Income from house property - Determination of Annual letting value of the property u/s 23 - assessee had taken huge amount as interest free deposit and rent was received at lower amount - HELD THAT:- Since the assessee had taken huge amount of interest free deposit, the AO has determined the ALV of the property at a higher amount. The principles for determining Annual letting Value has since been laid down by Hon’ble Bombay High Court in the case of Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT]. Hence the Tribunal has restored the issue to the file of the AO in order to determine the ALV by following the decision rendered in the above said case. Accordingly, consistent with the view taken in AY 2007-08 and 2008-09 in the assessee’s own case, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with similar directions.
Disallowance made u/s 40(a)(ia) - Whether TDS amount is remitted before the due date for filing return of income u/s 139(1)? - HELD THAT:- The provisions of sec. 40(a)(ia) amended by Finance Act 2010 provides that no disallowance shall be made u/s 40(a)(ia) of the Act shall be made, if the TDS amount is remitted before the due date for filing return of income u/s 139(1) of the Act. Accordingly, if the assessee has paid the TDS amount before the due date for filing return of income u/s 139(1) of the Act, no disallowance u/s 40(a)(ia) is required to be made. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to verify the date of payment of TDS amount and delete the disallowance if the TDS amount is paid before the due date for filing return of income u/s 139(1) .
Addition of notional interest in respect of interest free loan given to Thailand subsidiary - HELD THAT:- Identical addition was also made in AY 2008-09 and the Tribunal has restored the issue to the file of the AO to examine the issue afresh by following the decision rendered by Hon’ble Bombay High Court in the case of CIT Vs. Tata Auto-Comp Systems [2015 (4) TMI 681 - BOMBAY HIGH COURT]. Consistent with the view taken by the Tribunal in AY 2008-09, we restore this issue to the file of the AO with similar directions.
Scientific Research Expenditure - Non furnishing of Form 3CL - A.R submitted that the furnishing of Form 3CL is only directory and not mandatory for claiming deduction u/s 35(2AB) - HELD THAT:- Identical disallowance made by the AO in AY 2007-08 and 2008-09 has since been deleted by the Tribunal. In AY 2008-09, the assessee has field Form 3CL before the Tribunal and hence the Tribunal has observed that there should not be any bar for the assessee in availing the deduction u/s 35(2AB). However, since the AO has not examined Form 3CL, the Tribunal directed the AO to allow the claim after verifying Form 3CL.
From the order passed by Ld CIT(A) for AY 2009-10, we notice that the assessee has furnished Form 3CL dated 07-03-2012 before Ld CIT(A) in AY 2009-10. In any case, in the case laws relied upon by the assessee, furnishing of Form 3CL was held to be not mandatory. Under these set of facts, we are of the view that there is no reason to interfere with the order passed by Ld CIT(A) on this issue in both the years under consideration.
Gross profit by rejecting the books of accounts - HELD THAT:- In AY 2007-08 and 2008-09, the Ld CIT(A) has held that the rejection of books of accounts is not warranted and accordingly held that the provisions of sec. 145 are not attracted AND held that in terms of sec.145A of the Act, CENVAT & VAT are to be added to the Closing stock. As directed the AO to work out the addition on the basis of particulars to be submitted by the assessee in respect of closing stock. Accordingly, by following his decision rendered in AY 2007-08 and 2008-09, the Ld CIT(A) set aside the rejection of books of accounts and restricted the addition only to Closing stock as per the direction given in AY 2007-08. Since a particular view has already been taken by the Tribunal on identical issue in AY 2007-08 and 2008-09, following the same we uphold the order passed by Ld CIT(A) on this issue in both the years under consideration.
Disallowance made u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, the own funds available with the assessee is in far excess of the value of investments. Accordingly the presumption would be that the assessee has used its own funds for making investments as per the decision rendered in the case of HDFC Bank Ltd [2016 (3) TMI 755 - BOMBAY HIGH COURT] Accordingly disallowance of interest expenditure u/r 8D(2)(ii) is not called for. Accordingly we modify the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance of interest expenditure u/s 8D(2)(ii) of the I T Rules.
Disallowance made out of administrative expenses under Rule 8D(2)(iii) of the IT Rules, we notice that the assessee has brought forward most of the investments from the prior year. During the year under consideration, the assessee has made a fresh investment of ₹ 11.25 lakhs in a joint venture company. The assessee has received dividend income of ₹ 1.24 lakhs. Thus we notice that the activity of the assessee in the investment portfolio is very minimal. Under these set of facts, we are of the view that the application of Rule 8D(2)(iii) is not warranted in this case. Considering the activities of the assessee, we are of the view that a round sum disallowance of ₹ 10,000/- out of administrative expenses would meet the requirement of sec. 14A of the Act. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to restrict the disallowance out of administrative expenses to ₹ 10,000/-.
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2018 (3) TMI 1875
Depreciation on uninterrupted power supply (UPS) - rate of 60% OR 15% allowed AO - HELD THAT:- As on date there are number of decisions in favour of the assessee holding that UPS is to be granted the same rate of depreciation as that of a computer. In such circumstances, we do not find any reason to interfere with the order CIT(Appeals). Appeal of the Revenue stands dismissed. See SUNDARAM ASSET MANAGEMENT CO. LTD. [2014 (2) TMI 224 - ITAT CHENNAI] - Ground of appeal of the assessee is allowed and the assessee is entitled to claim depreciation @60% on UPS.
Disallowance u/s.14A - HELD THAT:- There is no doubt in our mind that the dissatisfaction expressed by the ld. Assessing Officer on the suo-motu disallowance made by the assessee was objective. No doubt in the judgment of Hon’ble Apex Court in the case of Godrej and Boyce Manufacturing Company Ltd [2017 (5) TMI 403 - SUPREME COURT] had held that ld. AO has to generate requisite satisfaction with regard to the correctness of the claim of the assessee on its admission of expenditure against exempt income before invoking Section 14A of the Act. Here in our opinion ld. AO had done so. The disallowance made was at 0.5% of average value of investment under Rule 8D(2) (iii) and as per the formula under Rule 8D(2) (ii). We do not find any reason to interfere with the disallowance made by the ld. AO. No reason to interfere with the disallowance made by the ld. Assessing Officer. - Decided against assessee.
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2018 (3) TMI 1874
TP Adjustment - Rejection of IDMA Laboratories Limited as comparable - HELD THAT:- IDMA is engaged in quality control testing and some trading activities. However, the sale of product in statement of profit and loss (pb/395) is nil while Revenue has originated mainly from sale of services.
There are contrarian facts as averred by rival parties and requires proper investigation by the AO/TPO including analysis of revenue derived and functions performed, risk involved and assets deployed, and in the fitness of the matter, we are inclined to set aside this issue regarding functional analysis of IDMA as comparable with the assessee to the file of the AO/TPO to properly investigate this comparable before arriving at the decision. The assessee is directed to provide all necessary details and information to substantiate its claim of IDMA being comparable with the assessee. AO/TPO to provide proper opportunity of being heard to the assessee in accordance with principles of natural justice. This ground of appeal No. 6 is allowed for statistical purposes.
Rejection of Dolphin Medical Services Limited(hereinafter called "Dolphin") as comparable - On perusal of audited financial statement of the assessee, it is observed that it is only engaged in providing R & D services which is the sole segment in which the assessee is operating. The bifurcation of revenue is not given in segment reporting while claim of the assessee is that around 39.55% revenue is from stability studies and testing services which required verification.
There are contrarian facts as averred by rival parties and requires proper investigation by the AO/TPO including analysis of revenue derived and functions performed, risk involved and assets deployed, and in the fitness of the matter, we are inclined to set aside this issue regarding functional analysis of Dolphin as comparable with the assessee to the file of the AO/TPO to properly investigate this comparable before arriving at the decision including considering extra ordinary events such as impact of declaration of bank accounts being NPA and extraordinary expenses incurred by this company Dolphin. Assessee is directed to provide all necessary details and information to substantiate its claim of Dolphin being comparable with the assessee before the AO/TPO in set aside proceedings. The AO/TPO to provide proper opportunity of being heard to the assessee in accordance with principles of natural justice. This ground of appeal No. 7 is allowed for statistical purposes.
Rejection of Vimta Labs Limited as comparable by Revenue - There are normal business risks attached to this industry to all players and merely because Vimta has incurred operating losses in the year under consideration, the same cannot be rejected as comparable. The functional profile of Vimta is comparable with the assessee as we have elaborated above and in our considered view, we do not find any justification for exclusion of Vimta as comparable. Thus, we hold that Vimta activities/functions are comparable to the assessee company and the same should be included as comparable. The assessee succeeds on this ground.
Rejection of SPAN Diagnostics Limited as comparable by Revenue - SPAN is not doing any contract R & D or analysis/testing for other companies. The assessee on the other hand is mainly engaged in contract R & D for generic APIs and is also engaged in analysis and testing for its AE. The DRP unfortunately has not given any finding on the functional analysis of this company SPAN. These prima-facie findings of ours need to be verified by the authorities below and assessee is required to rebut these prima-facie findings, which may require investigation into facts. Thus, this issue is restored to the file of the AO for necessary verifications and de-novo determination after considering our preliminary findings.
Inclusion of comparable Aurigene Discovery Technologies Limited by TPO - It is claimed by the assessee that the said Aurigene holds proprietary rights over intangibles and is engaged in drug discovery on partnership basis. Thus, revenue model of Aurigene is claimed by assessee to be different then the revenue model of the assessee. The assessee is claimed to be engaged in to contract R & D for generic API and operates on cost plus basis. This is claimed to be low risk area and rewards associated are also comparatively low vis-a-vis Aurigene who it is claimed is into high risk high award revenue model basis with its customers. These contentions of the assessee are no doubt meritorious for Auriegene exclusion but requires verification by authorities below. We are of considered view that this matter needs to be restored to the file of AO/TPO to reconsider this comparable on merits after hearing the assessee.
Biocon Limited and Syngene International Limited - assessee has computed margins w.r.t. these companies @19.94% and 25.34% respectively while the AO/TPO computed the same @ 25.66% and 29.62% respectively - While for computing margin of Syngene International Limited, it was submitted that the TPO relied on data base from Prowess while the assessee relied on audited financial statements which was claimed to be more reliable. The DRP noted that the assessee has duly filed an rectification application before TPO and directions were issued by DRP to AO/TPO to examine this issue for computation of correct margins of the two comparable. We do not see any prejudice to the assessee by the aforesaid directions of DRP with which we concur. The directions of DRP to AO/TPO to examine this issue for computation of correct margins of the aforesaid two comparables namely Biocon Limited and Syngene International Limited stood confirmed.
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