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Showing 161 to 180 of 1477 Records
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2016 (4) TMI 1318
Condonation of delay in filing appeal - service of order dated 8th May, 2003 was not by the mode prescribed under the statute - Held that:- The perusal of the order does not show a prayer to receive the order on 10th June, 2003 only but other documents also, for which, the writ petition was not entertained by this Court but was disposed of. The writ petition was in fact withdrawn by the petitioner-appellant - The appellant cannot take benefit of the order passed by this Court in the writ petition. It is for the reason that copy of the order dated 8th May, 2003 had been received by the assessee and the documentary evidence to this effect has been referred by the Tribunal.
There are no grounds to condone the delay - appeal dismissed.
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2016 (4) TMI 1317
Addition u/s 68 - Held that:- In the facts and circumstances of the present case in the face of numerous documentary evidences crying for bonafide of the assessee as against only suspicion and surmises in favour of the Department, we do not hesitate to hold that the proposition laid down by the Hon'ble Supreme Court in DURGA PRASAD MORE [1971 (8) TMI 17 - SUPREME COURT] is not applicable in the present case. Even the Assessing Officer has not been able to bring on record any adverse material, on his own investigations, the results have been in favour of the assessee. Suspicion, howsoever strong, cannot take part of the documentary evidences. Second contention of the Department with respect to the prices being manipulated and later on the company delisted from the Stock Exchange, we want to add that the company was very much in existence at the time of transaction and whatever happen later on is of no relevance. The grounds of appeal raised by the Revenue are dismissed
Disallowance u/s 14A - Held that:- Punjab & Haryana High Court in the case of Lakhani Marketing Inc 2014 (7) TMI 44 - PUNJAB AND HARYANA HIGH COURT] is squarely applicable to the facts of the present case, as no exempt income has been earned by the assessee during the year. As regards the contention of the learned D.R. that the said judgment was delivered before the insertion of Rule 8D, we are of the view that the Rule 8D is just a mechanism provided to compute the disallowance under section 14A of the Act. The provisions of the Rules can never prevails over the provisions of the Act. The judgment has been given in the context of the provisions of the section. If the situation demands for no disallowance, the computational provision does not come into the picture at all. In view of this, we uphold the action of the learned CIT (Appeals) in deleting the disallowance. The grounds raised by the Revenue are dismissed.
Addition u/s 69 - Held that:- The submission of two capital accounts does not in anyways be correlated to the cash deposits in bank. Therefore, this contention of the Assessing Officer is totally devoid of any merits. Further, we do not understand as on what basis the Assessing Officer has made addition of ₹ 16,10,000/-. Nowhere neither in assessment order nor in remand, he has detailed his reasoning. In view of this, we do not hesitate to confirm the order of the learned CIT (Appeals). Decided against revenue
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2016 (4) TMI 1316
Deduction u/s 35(2AB) denied - claim @ 150% of the expenditure incurred - assessee has failed to furnish copy of agreement with the prescribed authority - Held that:- As decided in own case in assessment year 2002–03assessee has made requisite compliance as has been required by the prescribed competent authority and compliance of all the procedural requirements has been examined by the competent authority while granting approval. In our considered view, we should look substantive compliance of the provisions. Documentation in any particular format and its approval in a particular manner is not object of this action. - Decided in favour of assessee
Disallowance of interest on the ground of advance made to Indian subsidiary - two of the companies to whom advances were made by the assessee are 100% subsidiary of the assessee - Held that:- Following decision of CIT v/s S.A. Builders, [2006 (12) TMI 82 - SUPREME COURT] as the advance made to the subsidiary are on account of commercial business / business expediency, proportionate disallowance out of interest expenditure cannot be made. Ground no.2, is allowed
Disallowance on account of PF and ESIC - paid beyond the prescribed date under the relevant statute but before the due date of filing of return of income under the Income Tax Act - Held that:- As decided in assessee's own case for the assessment year 2002–03 [2016 (1) TMI 752 - ITAT MUMBAI] as held the amount of employees contribution etc. deposited before the filing of return, cannot be disallowed u/s 43B - we allow assessee’s claim of deduction in respect of payment made towards PF contribution and ESIC. Decided in favour of assessee
Deduction in respect of DEPB credit un/s 80HHC - Held that:- There is no income to the assessee in terms of section 28(iiid) having considered the submissions of the assessee in the light of the relevant statutory provisions and the decision of the Hon'ble Supreme Court in Topman Exports [2012 (2) TMI 100 - SUPREME COURT OF INDIA], we find force in the submissions of the assessee. Moreover, it is seen, similar issue arose in assessee’s own case for assessment year 2001–02 restore the matter back to the file of the Assessing Officer to allow assessee’s claim in terms of principle laid down by the Hon'ble Supreme Court.
Addition on account of transfer pricing adjustment - disallowance of interest on the advances made to overseas subsidiaries - interest free advances to the overseas subsidiary on account of reimbursement of expenditure - Held that:- Such type of international transaction, domestic PLR rate cannot be applied and the rate of interest has to be quantified either with reference to LIBOR or EURIBOR depending upon the country and currency in which the transaction has taken place. Considering the facts of the present case, we are of the considered opinion that LIBOR rate of 1.698% plus 300 basis point would be the appropriate interest rate applicable to the international transactions relating to advancement of interest free loan / extended credit facility to the overseas A.E. Accordingly, we direct the Assessing Officer / Transfer Pricing Officer to compute the interest on the interest free advances paid to the A.E
Disallowance of interest expenditure - advances given to overseas subsidiary - Held that:- there is a business / trade relationship between the assessee and overseas subsidiary. That being the case, it cannot be said that investments made are not wholly and exclusively for the purpose of business. - commercial expediency has to be seen through the position of a prudent businessman and the Assessing Officer cannot step into the shoes of a businessman to find out the necessity or reasonableness of expenditure incurred - no disallowance out of interest expenditure can be made. As far as the findings of the Commissioner (Appeals) that assessee is eligible for deduction under section 57(iii), only because the assessee accepted the decision of the learned Commissioner (Appeals) in assessment year 2002–03, for whatever may be the reason that will not deprive the assessee from claiming deduction of interest expenditure under section 36(1)(iii). - Decided in favour of assessee
Rejection of indirect cost by 10% of the export incentives for computing profits under section - Held that:- Tribunal for assessment year 2002–03, in assessee’s own case, [2016 (1) TMI 752 - ITAT MUMBAI], it is noticed that while upholding the order of the learned Commissioner (Appeals) in assessee’s own case claim of reduction in indirect cost by 10% of the export incentives the Tribunal followed its own order for assessment year 2001–02 in assessee’s own case wherein the Tribunal had decided the issue by following the decision of the Hon'ble Supreme Court in Hero Export v/s CIT [2007 (11) TMI 13 - SUPREME COURT OF INDIA] as held principle of attribution is applicable to cases falling u/s 80HHC(3)(b) and therefore, part of indirect cost has to be apportioned to expenses incurred for earning export incentives. 10% of total income has been held as fair estimate in this case
Treatment of foreign exchange fluctuation gain as business income for grant of deduction under section 80HHC - Held that:- There is no dispute to the fact that foreign exchange gain was directly as a result of export made by the assessee. As observed from the order of the learned Commissioner (Appeals) similar relief was also granted to the assessee in the preceding assessment year. In view of the above, we do not find any infirmity in the order of the learned Commissioner (Appeals)
Netting of interest expenditure against interest income for computation of deduction under section 80HHC - Held that:- In assessment year 2002–03, it is noticed that while dealing with identical issue, the Tribunal followed its earlier decision in assessee’s own case for assessment year 2001–02, wherein the Tribunal has allowed assessee’s claim on the basis of ratio laid down by the Hon'ble Supreme Court in ACG Associate Capsules P. Ltd. v/s CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA] by holding that netting of interest is permissible.
Exclude excise duty and sales tax from the total turnover for computation of deduction under section 80HHC - Held that:- As in assessee’s own case for the assessment year 2002–03 ollowing the decision of the Hon'ble Supreme Court in CIT v/s Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] as held that excise duty should be excluded from the total turnover for the purposes of section 80HHC
Transfer pricing adjustment in respect of sale of finished goods - MAM selection - comparability - Held that:- Restore the matter back to the file of the Assessing Officer with a direction to make a fresh analysis relating to most appropriate method which could be adopted for bench marking the international transaction and, thereafter, undertake a comparably analysis.
Not to reduce the deduction computed under section 80HHC, while computing book profit under section 115JB - MAT - Held that:- This issue is directly covered in favour of the assessee by the judgment of the Hon’ble Supreme Court in the case of Ajanta Pharma Ltd. v. CIT [2010 (9) TMI 8 - SUPREME COURT] in which it has been held that clause (iv) of the Explanation to section 115JB covers full export profits of 100% as ₹eligible profits’ and the same cannot be reduced to 80% by relying on section 80HHC(1B)
Claim of deduction u/s 80HHC in respect of sales effected to SEZ unit Mission Pharma Logistic Pvt. Ltd. - Held that:- Conclusion drawn by the Assessing Officer being merely on conjecture and surmises without substantiated by positive evidence cannot be accepted. More so, when he does not dispute the fact that Mission Pharma Logistic Pvt. Ltd. is an SEZ unit. In the aforesaid facts and circumstances, department has failed to establish / demonstrate with cogent material that Mission Pharma Logistic Pvt. Ltd. is not eligible for deduction under section 10A, we are not able to interfere with the findings of the learned Commissioner (Appeals). Accordingly, upholding the order of the learned Commissioner (Appeals) on this issue,
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2016 (4) TMI 1315
Levy of service tax - spare parts sold in the course of providing service - Held that: - Service Tax law not being a commodity taxation law, the spare parts sold in the course of providing service during the warranty period shall not be liable to levy of service tax thereon - appeal allowed.
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2016 (4) TMI 1314
Depreciation on life saving equipments - @15% OR 40% - Held that:- As the machines acquired by the assessee though may not be identical to the machinery mentioned in the Income Tax Rules specifying the rate of depreciation in Part-III (xia) (d), (n), they appear to be similar in nature. Since depreciation is a beneficial provision to the assessee, it has to be broadly viewed and applied beneficially to the assessee. Moreover these equipments either become obsolete in a short while or have short life span. Therefore, we hereby direct the learned Assessing Officer to allow the claim of depreciation @ 40% on the cost of acquisition of the above mentioned equipments considering it as life saving equipments as provided under the Rules and accordingly delete the addition made - Decided in favour of assessee
Addition on belated payment of employees’ contribution to ESI - Held that:- Now it is an admitted fact that by the various decisions of higher judiciary the remittance of employees / employers contribution of PF/ESI etc., if remitted before the due date of filing the return disallowance cannot be made by invoking the provisions of section 43B of the Act. Therefore, we hereby direct the learned Assessing Officer to verify whether these payments are made before the due date of filing of return, and if found so, delete the disallowance made by invoking the provisions of section 43B of the Act.
Disallowance u/s 37 being marketing expenses - Held that:- ere is no prohibition in the Act to make payments to Doctors for the services rendered by them. In the case of the assessee, gifts were given to Doctors by way of gold coins in appreciation to their services. It can be construed as the fees paid in kind for the services rendered by the Doctors in the hospital. The presumption of the learned Assessing Officer that these payments are made to Doctors for canvassing patients cannot be accepted without any cogent evidence. Further the Revenue has not quantified the amount for which invoices, bills are not available for the expenditure incurred and the nature of unexplained expenses. Hence, it appears to be a passing remark - we hereby direct the learned Assessing Officer to delete the addition made on account of disallowance
Disallowance being expenses incurred on consumables and on repairs under section 40A(3) - Held that:- Considering the total turnover of the assessee for the relevant assessment year 2012-13 of ₹ 39.00 crores approximately, we find this claim of expenditure to be very negligible. Therefore, in the interest of justice, we hereby direct the learned Assessing Officer to delete the disallowance - Assessee appeal allowed.
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2016 (4) TMI 1313
TPA - comparable selection - Held that:- Assessee is engaged in two kinds of activities i.e. software services segment and back office support services i.e. both in the field of IT services and ITES, respectively, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (4) TMI 1312
Voice telephony - Allegation of the Petitioner is that the aforesaid amount at which the license for voice telephony is granted to Respondent No. 2 is a pittance inasmuch as in normal course grant of this license would have fetched a whopping sum of ₹ 25000 crores approximately. This insinuation is based upon a draft report of the Comptroller and Auditor General of India (CAG) which report estimated the aforesaid license fee/entry fee. It is also alleged that Respondent No. 1, while allowing voice telephony to Respondent No. 2, has not revised the Spectrum Usage Charges (SUC) matching with the charges which are paid by other operators who bought voice telephony.
Held that: - it follows that a policy decision was taken by the Government not only with regard to introduction of Unified Licensing regime but it also including allowing migration to UL from UASL as well as ISP to UL regime. This meant that those having UAS license which permitted data services only were allowed to migrate to Unified License enabling them to provide both data service as well as voice telephony. This was a pure policy decision after due deliberations by the experts in the fields and even TRAI had recommended allowing such migration - Such a policy decision, when not found to be arbitrary or based on irrelevant considerations or mala fide or against any statutory provisions, does not call for any interference by the Courts in exercise of power of judicial review.
Such a policy decision, when not found to be arbitrary or based on irrelevant considerations or mala fide or against any statutory provisions, does not call for any interference by the Courts in exercise of power of judicial review.
There is one more reason not to interfere with the aforesaid stipulation of SUC. The Government has taken the position that the conditions in the license granted to Respondent No. 2 empower the licenser/Government to change the terms of license and, therefore, whenever it is felt necessary and expedient in public interest, the percentage of SUC can be increased.
Petition dismissed.
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2016 (4) TMI 1311
Rate of Tax - cell phone chargers, which were being sold along with cell phones in a single package - entry No. 60 (f) (vii) of Part-II A of Schedule A of the H.P. VAT Act, 2005 - Held that: - Identical issues relating to both of question of alternative remedy as also regarding levy of VAT @ 13.75% on the mobile chargers have already been considered by this Court in the case of M/s Samsung India Electronics Pvt. Ltd. Versus State of H.P. & ors. [2015 (6) TMI 1155 - HIMACHAL PRADESH HIGH COURT], wherein it was held that the writ petitioner has not only an alternative and efficacious, rather a proper remedy under the provisions of H.P. VAT Act, 2005 and therefore, the present petition is not maintainable - petition dismissed.
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2016 (4) TMI 1310
Benefit of the Amnesty Scheme - denial of benefit on the ground that payment of tax and interest was made by them prior to the date of the notification whereas according to the respondents, the notification requires payment of tax only during the period of Amnesty Scheme - Held that: - it appears to be an admitted position that except for the fact that the petitioners had already paid the tax and interest prior to the coming into force of the Scheme, the respondents do not deny that the petitioners have otherwise satisfied all the requirements of the Scheme.
On a reading of the Preamble and the Memorandum of the Amnesty Scheme, it is clear that the benefit of the Scheme is to be given in respect of transactions commencing from 1st April, 2006 - The contention of the respondents that the Scheme is prospective in effect and, therefore, the petitioners are not entitled to the benefit thereof, therefore, is clearly based upon a misconception of the provisions of the Scheme which clearly provide for granting benefit thereof with effect from 1st April, 2006 and hence, the scheme by its very nature is retrospective in effect, viz. applicable to past transactions.
It is an admitted position that in the facts of the present case, the petitioners seek the benefit of the Scheme in relation to the years 2010-11, 2011-12 and 2012-13 which are well within the ambit of the Scheme namely, between 1st April, 2006 and 14th October, 2014.
If the interpretation put forth by the respondents were to be accepted, the same would result in a situation where dealers who have paid their taxes prior to the coming into force of the Scheme, would be denied the benefit thereof, whereas those dealers who have not paid the taxes would be granted the benefit of the Scheme, which would be clearly violative of the constitutional provisions as envisaged under Article 14 of the Constitution of India and would amount to putting a premium on non-payment of taxes whereby dealers who have not paid taxes steal a march over those dealers who have paid their taxes in time.
Petition allowed - respondents are hereby directed to forthwith grant the benefit of the Amnesty Scheme dated 14th October, 2014 to the petitioners - decided in favor of petitioner.
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2016 (4) TMI 1309
Validity of assessment order - reversal of input tax credit - TNVAT Act - DEPB scheme - reversal of credit on the ground that the input availed for the goods sold without Form 'C' had to be reversed and that as per Section 19(4), the input tax credit had to be availed over and above 3%, on the transfer of goods to other State otherwise by way of sale.
Can the Department deny the benefit of input tax credit for the duty paid by the petitioner on the purchase of DEPB licences, when such licences are considered to be "goods" within the meaning of Section 2 (21) and the tax paid on the purchase of such licences are considered as "input tax" under Section 2(24) and also when the charging provisions in Section 3(3) clearly entitle a registered dealer to such a benefit? - Held that: - From the scheme of Section 19(1), it appears that to become eligible for input tax credit, the following conditions should be satisfied by a person: (i) he should be a registered dealer; (ii) he must have paid or become obliged to pay a tax under this Act, to the seller on the purchase of taxable goods; and (iii) such taxable goods, on the purchase of which, he paid or became liable to pay tax under the Act, are also specified in the First Schedule.
What the petitioner claims is an input tax credit on the amount of duty paid for the purchase of a DEPB licence. The claim of the petitioner is that a DEPB licence is also a "good" within the meaning of the expression "goods" under Section 2(21) - A look at Section 19(1), which provides for input tax credit shows that the entitlement for such credit is restricted only to the amount of tax paid or payable under the Act by the registered dealer to the seller on his purchases of taxable goods specified in the First Schedule. Therefore, unless the claim for input tax credit relates to the tax paid or payable on the purchase of taxable goods specified in the First Schedule, it is not possible to grant credit - DEPB licences do not even fall under any of the categories mentioned in Section 19(2). The case of the petitioner does not even fall under Sub-Section (3) or Sub-Section (4) of Section 19. Therefore, our answer to the first question of law would be that the Department was right in denying the benefit of input tax credit in respect of the duty paid by the petitioner on the purchase of DEPB licences, despite the fact that these licences constitute goods within the meaning of Section 2(21).
DEPB licences do not even fall under any of the categories mentioned in Section 19(2). The case of the petitioner does not even fall under Sub-Section (3) or Sub-Section (4) of Section 19. Therefore, our answer to the first question of law would be that the Department was right in denying the benefit of input tax credit in respect of the duty paid by the petitioner on the purchase of DEPB licences, despite the fact that these licences constitute goods within the meaning of Section 2(21).
Is the list mentioned in Clauses (i) to (vi) of Sub-Section (2) of Section 19 enumerative or exhaustive? - Held that: - entitlement, non-entitlement, etc., are covered with reference to specifics in the other Sub-Sections of Section 19. It does not mean that the very entitlement to credit could be traced only to Sub-Sections (2) to (4) and the non-entitlement could be traced to Sub-Sections (5) to (10). If a dealer satisfies the essential conditions stipulated in Sub-Section (1), he is entitled to credit. Therefore, we are of the considered view that Sub-Section (2) of Section 19 is enumerative and not exhaustive.
Revision dismissed.
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2016 (4) TMI 1308
Club or Association Services - penalty - Held that: - the penalty issue cannot be decided without first deciding the appellant’s liability to pay service tax - the present appeal requires to be remanded to the Commissioner (Appeals) for fresh decision alongwith the assessee’s appeal filed against confirmation of demand of duty - appeal allowed by way of remand.
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2016 (4) TMI 1307
Benefit of exemption u/s.11 denied - assessee is not engaged in charitable activity and has not provided services to the underprivileged section of the society - running of the canteen - Held that:- Denial of exemption u/s.11 by the AO on account of running of the canteen is not correct, we find no infirmity in his order holding that the assessee cannot be denied exemption u/s.11 of the Act for running a canteen and making profit out of it. So long as the surplus generated from the canteen is utilized for making relief, the exemption u/s.11 in our opinion cannot be denied unless it is brought on record that such surplus generated has not been utilized for charitable purposes or has been utilized for non charitable purposes. Since there is no such finding given by the AO, therefore, denial of exemption u/s.11 on account of running of the canteen is not justified.
As regards the objection of the AO that assessee trust has organized musical nights and such programmes are not warranted in case of a charitable trust, we find this objection of the AO is also not at all justified. When the assessee has clarified that the musical nights were performed by renowned artists who did not take any remuneration from the trust and the main intension of organizing such programmes was to reduce the stress level of the patients and their relatives, therefore, under these circumstances denial of exemption u/s.11 in our opinion is not warranted. The Ld.CIT(A) has properly appreciated the facts and rejected the objection of the AO on this issue by giving valid reasons which in our opinion is proper and justified.
Next objection of the AO that the assessee had received donations from the patients in lieu of medical services rendered for which he has given examples such as Mr. Dilip Nayakude, Mrs. Kavita Waghle and Mr. Rajesh Deepak etc. We find the assessee has conclusively proved before us that the donation given by the above persons are much less than the concession given to them. Since the CIT(A) has rejected the objection of the AO after considering the various evidences furnished by the assessee before him wherein the above persons had clarified that they had given donations to the assessee trust on their own will and since the AO in the remand proceedings also could not controvert the various submissions given by the assessee, therefore, the order of the CIT(A) holding that there is no merit in the allegation of the AO that the assessee trust has issued donation receipts and has evaded tax is correct.
As regards the objection of the AO that the assessee has violated the provisions of section 13(1)(c) of the Act by paying remuneration of ₹ 90,000/- to Mrs. Meena Kelkar and ₹ 6 lakhs to Mrs. Bharti Mangeshkar is concerened, we find such objection of the AO is also not correct as from the various details furnished by the assessee we find Mr. Meena Kelkar was earlier looking after house keeping department of Sanjeevan Hospital and thus was having enough experience. Further, she was appointed in place of Smt. Sarita Shelke who was looking after the house keeping activity and she was paid remuneration of ₹ 16,000/- per month. The various evidences furnished by the assessee in the paper book show that Mr. Meena Kelkar was actually looking after the house keeping activity of the assessee trust. The trustee Dr. Dhananjay Kelkar had also filed an affidavit before the CIT(A) that the remark made by the AO was incorrect and he had not made any statement in the assessment proceedings as alleged by the AO.
The next objection of the AO that assessee has received rent of ₹ 2,88,100/- from various parties which includes ₹ 1,88,000/- from Bharti Airtel for allowing them to erect their tower in the premises of the trust which is commercial exploitation of the property, CIT(A) has already held that the same is for supplementing the main object of the assessee trust. We agree with the argument of the assessee that erection of such tower in the premises of the hospital enhances the signal for telecommunication. Further, as the rent has been shown in the books of account and has been utilized for the objects of the trust, therefore, we uphold the order of the CIT(A) on this issue and hold that exemption cannot be denied for receiving rent from Bharti Airtel for erecting tower in the hospital premises.
Thus we find no infirmity in his order allowing the benefit of exemption u/s.11 . - Decided in favour of assessee
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2016 (4) TMI 1306
Transfer pricing adjustment - treatment of extraordinary cost by the TPO as operating cost - Held that:- The assessee bears all risks including environmental risk, which position is borne out from the assessee’s Transfer pricing study report and has not been disputed by the ld. AR. This indicates that revenues of the assessee include compensation for environmental loss as well, which has not been treated as an item of non-operating revenue. Once there is such additional compensation also, which has been taken as an item of operating revenue, then the costs incurred in bearing such risks have to be naturally considered as operating costs of the assessee. In view of the above discussion, we are satisfied that the TPO was fully justified in not allowing reduction on account of extra-ordinary costs to the tune of ₹ 12.44 crore while calculating the assessee’s operating profit margin. We, therefore, refuse to countenance the assessee’s contention on this issue.
TP adjustment in respect of capital expenses - MAM selection - Held that:- Two items, namely, `Purchase of capital goods’ at ₹ 124.82 crore and `Fees for technical & consultancy services’ at ₹ 15.50 crore have been capitalized by the assessee and hence cannot be considered for making transfer pricing adjustment under the TNMM. Since operating profit is computed by considering the items of operating costs alone, the value of these two items which are capital in nature and have been capitalized in the balance sheet, cannot be included in the base amount for applying the operating profit margin rate of the comparables for computing the amount of transfer pricing adjustment. Direct to exclude them from the base amount of ₹ 148.78 crore for applying the mean profit margin rate of the comparables to determine the amount of transfer pricing adjustment under the TNMM.
TPO has considered these two items under the overall TNMM, as was wrongly done by the assessee also and then he went on to consider the value of these two transactions of capital nature for making transfer pricing adjustment. This approach of benchmarking these items of balance sheet under the TNMM, as done by the assessee and then followed by the TPO, is not appropriate, thus, calling for correction. No doubt, the stand of the assessee seeking exclusion of these two transactions of capital nature from the base amount for calculating transfer pricing adjustment under the TNMM is justified, but, at the same time these transactions of capital nature are required to be benchmarked by considering CUP as the most appropriate method. The ld. AR during the course of hearing admitted this position. Since the TPO has not done benchmarking in a proper manner as discussed above, we set aside the impugned order and direct the TPO/AO to benchmark these transactions of capital nature under the CUP method independent of other transactions under the TNMM.
Selection of comparables - Held that:- Functional comparability has to be necessarily considered before including or excluding a company from the list of comparables. Nowhere has it been laid down in this case that a company with higher or lower turnover can be excluded merely for this reason. Therefore Bharat Glass Tube Ltd. is directed to be included in the final set of comparables.
Triveni Glass Ltd. - no extraordinary reasons for incurring of loss of Triveni Glass Ltd. for the year and this company is not a consistent loss making company, we hold that the same cannot be excluded.
Gujarat Guardian Ltd. - TPO has thoroughly dealt with all the objections raised by the assessee, such as, earning of dividend income by Gujarat Guardian, difference in power consumption and payment of royalty/fees for technical services, etc. AR has not brought any material on record to fortify his contention about difference in power consumption rates of the assessee vis-à-vis this company. TPO was right in including this company in the list of comparables.
Thus we aside the impugned order on the question of addition towards transfer pricing adjustment of Float glass division and remit the matter to the file of AO/TPO for recalculating the ALP and consequential addition.
Addition u/s 14A - Held that:- Hon’ble jurisdictional High Court in Maxopp Investments Ltd. Vs. CIT (2011 (11) TMI 267 - Delhi High Court) has held that the provisions of Rule 8D are applicable only from the assessment year 2008-09. It has further been held that in the period anterior to that, the disallowance is required to be made on some reasonable basis. In view of the judgment above on the point, we cannot approve the view taken by the AO in computing the disallowance u/s 14A as per the mandate of Rule 8D of the Income-tax Rules. Accordingly matter is restored to the file of the AO for making disallowance u/s 14A on some reasonable basis
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2016 (4) TMI 1305
Addition u/s 41 - remission or cessation of liability - explanation offered by the assessee was not satisfactory - Held that:- In the present case, once the credit entry qua Sh. Anup Kumar is continuing in the assessee’s books over several years and it has been accepted as such, the ld. CIT(A) has clearly erred while accepting Sh. Anup Kumar’s version that he did not owe anything to the assessee and rejecting the assessee’s entry of credit outstanding. Thereby, the Authorities below have raised the issue of genuineness of the credit entry during the year under consideration, which action is not sustainable in view of the ‘Jain Exports Pvt. Ltd.’ (2013 (5) TMI 690 - DELHI HIGH COURT ). Therefore the addition is deleted.
Apropos party no.2, the entry has been standing in the assessee’s books over the years and it has not been challenged in the initial year of such entry. no conclusion of cessation of liability can be arrived at. As such, this addition is deleted.
So far as regards party no. 3, i.e., Civil Surgeon, Hoshiarpur the fact that the entry was statedly a wrong entry does not stand disputed by the Taxing Authorities, since they had not disputed the fact that this entry was rectified in the next year. As such, existing over the years, this entry has not been earlier decided against the assessee. Accordingly, this addition is also deleted. - Decided in favour of assessee.
Trading addition - unaccounted sales - Held that:- It is trite that no addition can be made in the trading results without any material on record and without pointing out any defect, either in the method of accounting of the assessee, or in the books of account maintained by the assessee. See‘J.A. Trivedi Brothers vs. CIT’(1984 (11) TMI 39 - MADHYA PRADESH High Court) - Decided in favour of assessee.
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2016 (4) TMI 1304
TPA - comparable selection - Held that:- Referring to the Software applications developed by the assessee are in the field of telecom call processing, element management systems and signaling protocol adoption, thus companies functionally dissimilar with that of assessed to be deselected from final list.
Deduction u/s. 10A - Held that:- CIT v. Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT), wherein it was held that total turnover is sum total of export turnover and domestic turnover. Hence, when these two items of expenses are to be excluded from export turnover, it automatically gets excluded from total turnover because it cannot be said that these expenses are part of domestic turnover and therefore, when export turnover is reduced, total turnover is automatically reduced because total turnover as per this judgment of Hon'ble jurisdictional High Court is sum total of export turnover + domestic turnover.
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2016 (4) TMI 1303
Release of detained goods - goods detained on the ground that there was no CST tax collected - Held that: - since the petitioner is willing to pay the one time tax amount of ₹ 1,28,934/-, the petitioner is directed to pay the said amount and on payment of the said amount, the respondent is directed to release the goods and the vehicles forthwith - petition disposed off.
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2016 (4) TMI 1302
The Registry is directed to re-number the present suit as CS (Commercial) and while allotting the new number, the Registry shall also indicate on the file, the old registration number of the case.
Ld. proxy counsel for defendant seeks adjournment on the ground that the main counsel is suffering from fever and is not available today.
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2016 (4) TMI 1301
Offence under PMLA - Adjudicating Authority was not composed as required under Section 6(1) of the Act as it had only one member, therefore was corum non judice - Held that:- As during the pendency of the present petition, by virtue of order dated 09.09.2015 filed on behalf of the authority concerned, the Court clarified with regard to the interim order providing that the provisional attachment will not expire after 180 days as the petition was pending and the relief was in operation.
Now, therefor the proceedings can be carried on before the properly constituted Adjudicating Authority. In this view, the present petition is liable to be disposed of requiring the Adjudicating Authority to take up the case and pass appropriate order.
In view of aforesaid development and the duly constituted Adjudicating Authority functioning, the said authority-respondent No.3 herein is directed to proceed with the case and decide the same after giving opportunity of hearing to the parties. It is clarified that this Court has not expressed any opinion on merits. The Adjudicating Authority shall consider the matter on its merits and in accordance with law. The parties are at liberty to raise all contentions including in respect of show-cause notice as may be permissible in law and the Adjudicating Authority shall deal with the same on its merits and decide the matter.
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2016 (4) TMI 1300
Application under Section 8 of Arbitration and Conciliation Act - Held that:- Petitioner is invoking a statutory remedy which is in addition to the contractual remedy. Moreover, under Section 397(2)(b) of the Companies Act, 1956, Company Law Board has to come to a conclusion that a case for winding up is made out, prior to granting any relief. In Haryana Telecom Ltd. Vs. Sterlite Industries (India) Ltd, (1999 (7) TMI 545 - SUPREME COURT OF INDIA) Supreme Court has held that arbitration clause is not attracted to winding up proceedings.
It is also settled law that under Sections 397 and 398 of the Companies Act, relief can be granted even contrary to any Articles of Association, which an Arbitrator cannot do as he is a creature of the contract i.e. Articles of Association. Consequently, the present writ petition being bereft of merit is dismissed along with the applications.
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2016 (4) TMI 1299
Deduction u/s 10A - deduction u/s.10A was restricted by CIT(A) to the extent of receipt of foreign exchange upto 30-9-2008 - Held that:- Deduction u/a.10A was restricted to the extent of export receipts realised uptll 30-9-2008. The assessee company is situated In SEZ, the RBI, the Competent Authority, u/s.10A(3) of the Act had vide its Circular bearing A.P. -(DIR Series) Circular No:91 dated 1st April, 2003 relaxed the realization of export proceeds.
See Tara Jewels Exports case [2014 (1) TMI 1828 - ITAT MUMBAI] wherein held that RBI has clarified that it has not stipulated any time period for the realization of the sale proceeds for the SEZ units, as the assessee. it can-only be considered as having allowed an indefinite time period for the same. Consequently, it cannot be said that the condition of section 10A(3) is' not satisfied. The objection of the Revenue is, in our view, not valid.
In view of the above, we restore the matter back to the file of AO for recomputing eligible deduction after considering the RBI Circular and also considering the decision of coordinate bench as discussed above. Appeal of the assessee is allowed for statistical purposes.
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