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Showing 161 to 180 of 2006 Records
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2018 (4) TMI 1850
TP Adjustment - comparable selection - Assessee is engaged in the business of providing IT Enabled Services to its parent company - HELD THAT:- CG VAK Software & Exports Ltd.rejected by the TPO on the ground that its turnover is less than ₹ 1 crore in ITeS segment - It is evident that when the company is functionally similar, the company cannot be rejected on the ground that the company’s turnover is less than ₹ 1 crore especially when the companies with high turnover have not been rejected. To the same effect is the Hon’ble Delhi High Court decision in the case of CIT v Mckinsey Knowledge Centre India Pvt Ltd [2015 (3) TMI 1226 - DELHI HIGH COURT] - From perusal of the orders of the lower authorities, it is not clear whether the company passes through the filters applied by the TPO. Therefore, we deem it fit to remit this issue back to the file of the TPO with a direction to examine whether this company had passed through other filters applied by the TPO.
R Systems International Ltd. rejected on the ground that it follows different accounting year - Hon’ble Delhi High Court has held in Mckinsey Knowledge Centre India Pvt Ltd. [2015 (3) TMI 1226 - DELHI HIGH COURT] that the company cannot be rejected simply because it follows different accounting year and results of adjusted period can be adopted - in the present case, the assessee-company had not discharged the onus of filing the results for adjusted period of the company. In absence of this segmental information, inclusion of this company is not possible. Further, no such plea was made before TPO. Hence, the ground of appeal filed in this regard is rejected.
Accentia Technologies Ltd. rejected as functionly dissimilar with that of assessee
Accentia Technologies Ltd.not comparable with that of assessee as relying on M/S. TESCO HINDUSTAN SERVICE CENTRE PVT. LTD., [2017 (1) TMI 1673 - ITAT BANGALORE]
E-clerx Services Ltd., is functionally different as it provides high end data analytics and customized process solutions and is a leading Indian provider of KPO services
Infosys BPO Ltd.is functionally dis-similar and different from the assessee and hence is not comparable and the finding rendered in the case of Trilogy E-Business Software India Pvt. Ltd. [2016 (6) TMI 1293 - ITAT BANGALORE] for Assessment Year 2007-08 is applicable to this year also.
Deduction u/s 10A - direction of the Hon'ble DRP to include earning of foreign exchange, miscellaneous income as part of business income for the purpose of calculating benefit u/s 10A - HELD THAT:- This issue is no longer res integra as it is resolved by the Hon'ble jurisdictional High Court in the case of CIT vs. Hewlett Packard Global Soft Ltd [2017 (11) TMI 205 - KARNATAKA HIGH COURT] as held incidental activity of parking of Surplus Funds with the Banks or advancing of staff loans by such special category of assessees covered under sections 10-A or 10-B of the Act is integral part of their export business activity and a business decision taken in view of the commercial expediency and the interest income earned incidentally cannot be de-linked from its profits and gains derived by the Undertaking engaged in the export of Articles as envisaged under Section10-A or section 10-B of the Act and cannot be taxed separately under section 56 - Decided against revenue.
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2018 (4) TMI 1849
Recovery of amount from the account of the ‘Corporate Debtor’ - appropriation of amount towards its own dues - the application was already admitted and the moratorium was already declared - HELD THAT:- Once the moratorium is in force the financial creditor including the bank has to prefer its claim before the RP, which would be considered alongwith other claims as per law - Further, it is found that there is direct violation of Section 14(1)(c) which creates a bar prohibiting any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation Act is also prohibited. Besides there is violations of order of moratorium passed by this Tribunal on 01.06.2017. As there is a direct statutory violation we find that it is a fit case for imposing cost. Accordingly, a cost of ₹ 25,000/- is imposed on the non applicant / respondent. The cost be deposited in the Prime Minister Welfare Fund.
While we are not inclined to interfere with the impugned order dated 25th January, 2018 but set aside the order whereunder cost of ₹ 25000/- has been imposed and make our interim order dated 21st March, 2018 absolute which will continue during the period of moratorium. However, after the period of moratorium is over, it will be open to the bank to act in accordance with guidelines of Reserve Bank of India to manage the account - Appeal disposed off.
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2018 (4) TMI 1848
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - pre-existence of dispute or not - service of demand notice - HELD THAT:- Perusal of the affidavit filed under Section 9(3)(b) clearly shows that even though the notice of default has been received by OC prior to the filing of this Petition and which incidentally has also been annexed as mentioned in the earlier part of the order, there seems to be a covert attempt on the part of the Petitioner at least at the stage of moving this Petition to not to state anything in Affidavit filed under Section 9(3)(b) of IBC, 2016 with a view not to have the Petition rejected outright taking into consideration Section 9(5)(ii)(d) of IBC, 2016. The affidavit thereby filed has stifled the truth in effect of the notice of dispute as sent by the CD and which had precluded the Tribunal from exercising its powers under Section 9(5)(ii)(d) of IBC, 2016 for rejection Of the Petition if thought fit and which subsequently had lead to issue of notice to CD and the attendant hearings of this Petition by this Tribunal. The attitude of the Petitioner in this regard stands strongly deprecated in invoking the provisions of IBC,2016 despite being aware that there is a dispute in existence and in any case that a notice of dispute is required to be brought to the notice of this Tribunal by filing an affidavit disclosing facts as required under Section 9(3)(b) on the date of moving the Petition before this Tribunal and thus the Petition deserves to be dismissed on this ground alone.
The dispute between the OC and CD predates 2017 and there has been a running battle between the OC on the one hand and MSEDCL on the other with respect to CPP and CGP status of the OC and its users, all of which goes against the grain of Lol and subsequent PSA entered into between OC and CD. The contentions of the CD in this regard are not illusory or moon shine is vouched by the records that even as of today the issue with MSEDCL has not attained finality and the OC is required to approach Central Electricity Regulatory Commission (CERC) as per the latest order dated 29.12.2017 as it is having a pan India presence and the issue even though contended by the Lerned Counsel for OC to be technical has a significant financial implication upon CD, in view of repeated demands made from it by MSEDCL for the relevant period for which supply of power was made by OC to CD - Further, it is also to be seen that all the same the CD cannot be made to wait for final outcome of the running battle between OC and MSEDCL as the PSA itself is for a year and the delay in determination of CPP status has a significant monetary impact on the CD by way of increased levy to the extent imposed by MSEDCL. Further it is also to be seen that the PSA itself has been terminated vide termination letter dated 20911.2016, which is much prior to the notice of default by OC and further, whether such termination is wrongful or whether the CD is entitled to damages as claimed by it, all of which is not for this Tribunal to decide in a summary manner and for which a suit or arbitration is more appropriately suited.
Petition is dismissed with cost of ₹ 1,00,000/-.
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2018 (4) TMI 1847
Condonation of delay - CIT(A) in deleted the addition in violation of Rule 46A of the I.T. Rules, 1962 - CIT(A) on admitting the additional evidences directed the AO to examine the case properly by calling the books of accounts and other details and file a Remand Report - HELD THAT:- Despite giving several sufficient opportunities, the AO did not file the Remand Report before CIT(A). He did not examine books of account and other details. Therefore, AO has shown negligency in not filing the Remand Report before Ld.CIT(A). The same conduct of the AO continued even after passing of the impugned appellate order because the appellate order was kept pending without any action and no appeal has been filed by the Department within the period of limitation. It is simply stated in the application for condonation of delay that due to time barring assessment, the impugned order was overlooked and got barred by limitation.
It is a fact that AO was aware that departmental appeal would be meritless. It is, therefore, clear that the AO deliberately overlooked the impugned order and did not file appeal before the Tribunal within the period of limitation. Even the authorization by Ld. Pr. CIT to file the appeal have been granted after the period of limitation to file the appeal on 07.06.2016. Therefore, no sufficient cause has been shown to explain the delay in filing the appeal before the Tribunal beyond the period of limitation.
The application is not supported by any evidence. We, therefore, hold that the Revenue Department has failed to explain the delay in filing the appeal was due to sufficient cause, therefore, the appeal of the Revenue shall have to be dismissed as time barred. We reject the application for condonation of delay and treat the departmental appeal as time barred and dismiss the same in limine.
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2018 (4) TMI 1846
Grant of Bail - acquiring assets disproportionate to his known source of legal income - Nature and gravity of charge and severity of punishment in the event of conviction - Possibility of AO meddling with investigation and tampering the evidence - Proposed marriage of AOs son - HELD THAT:- After conducting preliminary searches the value of disproportionate assets increased to ₹ 2,50,40,881/-. This figure does not include in itself the worth of valuable articles recovered from the locker of AO in SBI, Warasiguda Branch, Hyderabad. No doubt, in the grounds of bail application, it is the contention of AO that out of 19 items cited, items 1 to 4 and 6 to 13 alone belong to him and his family members and rest of the items belong to his sister-in-law and others. Even if the said contention is taken into consideration, the value of items 1 to 4 and 6 to 13 mentioned in remand report roughly comes to ₹ 2,16,78,881/-. However, his savings for the said period were only worth ₹ 88,54,000/-. Therefore, even if his contention is accepted, still the worth of disproportionate assets comes to ₹ 1,28,24,881/- - a careful scrutiny of the aforesaid figures would manifest that even if the contention of petitioner is accepted and some errors in the appraisal of the income, expenditure and assets are taken into consideration, still, AO possessing assets disproportionate to his income cannot be ruled out at this juncture. Of course, I must hasten that this is only a theoretical analysis to know about the existence or non-existence of prima facie case to consider the bail application. Ultimate truth has to be exhumed after investigation. Hence, there exists a strong prima facie case against AO which requires a thorough investigation.
The contention of petitioner that the Registry of High Court has granted permission to register FIR in a post-haste manner does not hold water because, the letter dated 17.03.2018 of Director General, ACB to the Registrar General would show that upon securing permission, the ACB at first conducted discrete enquiry against AO and submitted a report and after satisfying with the prima facie material, the High Court accorded permission to register the FIR against AO. Hence it appears a methodical exercise was undertaken prior to registration of FIR.
Nature and gravity of charge and severity of punishment in the event of conviction - HELD THAT:- It is not out of place here to mention that each time a Judicial Officer is accused of committing bribery or other related offence, the reputation of judicial institution itself stands for trial. The judicial edifice is built not with bricks and cement but with belief and confidence reposed by the public on the institution. That is why absolute honesty and integrity are regarded as the minimum qualifications for a Judicial Officer to hold the mace of justice. A minutest impious deed of even a single individual will bring disrepute to the majesty of justice. In that context, the impact of the offence has to be viewed even at the stage of bail, particularly when prima facie case is found out.
Possibility of AO meddling with investigation and tampering the evidence - HELD THAT:- AO being Judicial Officer, there is a possibility of his finding out the ways to stifle the crucial evidence and scuttle the process of investigation with his legal acumen. Such a possibility cannot be obviated. The contention of AO that the entire investigation is completed with the searches conducted at various places and his service record is available with the High Court and hence, he cannot tamper with the evidence cannot be countenanced in view of the crucial part of investigation still left over.
Ill-health of the petitioner/AO - HELD THAT:- The trial Court considering the discharge summary issued by NIMS, which revealed his fit condition, did not accede to grant bail on the health grounds - there are no reason to come to a different conclusion.
Proposed marriage of AOs son - HELD THAT:- The petitioner only produced a manuscript of lagna patrika showing the marriage is fixed to be performed on 06.05.2018. No printed wedding card is produced for verification. Even assuming that his sons marriage is going to be held on 06.05.2018, in view of gravity of the offence and pending investigation at the crucial stage, a regular and full-fledged bail cannot be granted to AO at this stage.
Bail application dismissed.
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2018 (4) TMI 1845
The Supreme Court of India granted the Learned ASG two weeks to file a reply, with a rejoinder due within one week after that. The case will be listed after three weeks, and the interim order will continue in the meantime.
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2018 (4) TMI 1844
Exemption u/s.10A - assessee is duly registered with STPI as per requirement of the scheme of the year 2010-11 and the claim of deduction u/s. 10A of the Act has been allowed after due verification for the past 10 assessment years. But in the assessment year under appeal i.e. 2010-11, the claim of deduction was disallowed by AO - HELD THAT:- On facts, it is undisputed fact that the assessee has been consistently claiming deduction and the Revenue allowed the same without any disturbance. The Assessing Officer disturbed the same for the first time for the A.Y 2011-11.
Considering ratio laid down in the case of Paul Brothers [1992 (10) TMI 5 - BOMBAY HIGH COURT] we cannot appreciate the decisions of Assessing Officer and CIT(A). The decision of Pune Bench of Tribunal has already adopted the similar proposition as extracted above. Considering the above, we are of opinion that this legal aspect stands covered in favour of the assessee. Thus, we find merit on the grounds raised by assessee and argument made by Ld. DR on this context becomes academic exercise. Hence, the grounds raised by the assessee are allowed.
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2018 (4) TMI 1843
Submission of defaulted returns - Condonation of Delay Scheme, 2018 - High Court of Delhi has permitted the Directors to file compliance under CODS, 2018 - Applicability of of Section 164(2)(a) as well as Section 167 of the Companies Act of 2013 - HELD THAT:- In order to balance the equities while the respondents rights to argue and make the submissions are reserved and four weeks time is granted to file reply.
This Court deems it appropriate to allow the petitioners to continue to hold the post of Director in the defaulting Companies as well as other Companies so that they may be able to avail the benefit of CODS, 2018 during the pendency of the writ petition.
Learned Counsel further submits that on account of Company in default names having been struck off in terms of Section 248(5) of the Companies Act, 2013, the benefit of CODS, 2018 may not be allowed online. It is also prayed that they may be allowed to file hard copies of returns under CODS, 2018 and the respondents may be directed to accept the same - the prayer seems to be reasonable.
Petition disposed off.
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2018 (4) TMI 1842
Long term capital gain on sale of agriculture land - transfer of land in the year under consideration - only 10% of the sale consideration was received during the year and balance 90% consideration was received on 14.08.2008 i.e. AY 2009-10 - Benefit of investments in new agriculture land u/s 54B & construction of house u/s 54 F invested subsequent to the receipt of money against sale of agriculture land - HELD THAT:- As assessee admitted that factual finding with regard to the assessees land being included and covered in the disputed lands before the High Court, were not available on record but at the same time, contended that the same could be established by the assessee by placing relevant material and evidence on record subject to verification by the department of the same.
As assessee requested, therefore, that the issue be restored to the Assessing Officer so as to enable the assessee to establish the identity of the facts of the present case with that in the case of Rajiv Kumar [2016 (7) TMI 184 - ITAT CHANDIGARH] - As for the affidavit regarding postponement of handing over of possession of land by the sellers to the buyers only on receipt of complete consideration, the Ld. counsel for assessee stated that no such affidavit was filed in the case of Parshotam Kumar which was also an identical case decided on the lines of Rajiv Kumar(supra) following the said decision.
We restore the issue back to the Assessing Officer for the limited purpose of enabling the assessee to establish the identity of the facts of the present case with that in the case of Rajiv Kumar(supra) and Purshotam Kumar (supra) .
Claim of exemption u/s 54B & 54F - Considering fair market value of property and relating to grant of benefit of cost of improvement of land, cannot be adjudicated at this juncture. These issues are, therefore, also restored to the Assessing Officer to be adjudicated upon afresh after deciding the main issue in the present appeal as per our directions with regard to ground No.1 raised by the assessee. The grounds of appeal Nos.2 to 4 are also, therefore, allowed for statistical purposes.
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2018 (4) TMI 1841
Addition on account of advances given for purchase of land and disclosed in the statement recorded under section 132(4) but was not offered to tax - assessee in his statement recorded under section 132(4) has admitted undisclosed income on account of advances given to various persons for purchase of land - HELD THAT:- In the case in hand, the assessee never disputed the amounts or entries recorded in the seized material but the assessee has subsequently explained and brought on record the fact that out of the total amount of ₹ 11,25,00,000/-, a sum of ₹ 1,60,00,000/- given as an advance during the financial year 2012-13 relevant to the assessment year 2013-14 was received back by the assessee on 20th April, 2013 and, therefore, the said amount was available with the assessee for giving advances during the year under consideration.
This stand of the assessee is not disputing the entries in the seized material and further the assessee has filed the evidences in support of the fact that the said amount was received back by the assessee. Since these transactions are unaccounted transactions and only found during the course of search and seizure operation, therefore, there cannot be any other evidence in the shape of entries in the books of accounts except the persons concerned who have duly made the statements on oath as the affidavits were filed by the assessee in this regard.
Statement u/s 132(4) alone cannot be considered as a conclusive piece of evidence by ignoring the other facts and evidence which may establish the correct facts regarding the transactions in dispute - when the assessee has filed the evidences in support of the claim that a sum of ₹ 1,60,00,000/- was received by the assessee which was available for advance given during the year under consideration then in the absence of any enquiry conducted by the AO to controvert the facts and to dispute the evidence filed by the assessee, the addition made by the AO and sustained by the ld. CIT (A) is not justified. Hence we delete the addition made on this account. - Decided in favour of assessee.
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2018 (4) TMI 1840
TP Adjustment - exclusion of a comparable i.e. Wipro Technology Services Limited in the Arm’s Length Price (ALP) determination - said entity reported abnormally high profits and had a large turnover and had the benefit of strong brand presence - also found that the entity (Wipro Technology) had undergone restructuring which had a significant impact upon its return and profitability - HELD THAT:- This Court is of the opinion that the ITAT conclusions were reasonable and justified. A strong brand presence and unusual events such as amalgamation, merger, etc. – which can have a miserable impact and are discerning from the record, are reasonable grounds for excluding a particular comparable; which was a case of Wipro Technology. The Tribunal also noted that in such cases the issue of comparable has to been seen from the robust market practice as well.No question of law arises.
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2018 (4) TMI 1839
Bogus LTCG - exemption u/s 10(38) - HELD THAT:- Shares were allotted in a private placement by the company at par which were dematerialized and thereafter sold by the assessee.
The finding of the AO in the case of the assessee is based merely on suspicion and surmises without bringing any cogent material to establish that the assessee has introduced his unaccounted income in the shape of long term capital gain. Transaction in the case is not a trading of the shares through brokers but it was an allotment by the company in a private placement and thereafter the shares were dematerialized and duly reflected in the demat account of the assessee, therefore, the holding of the shares in the demat account and subsequently transfer of the same from the demat account cannot be doubted and consequently the transaction of sale cannot be held as bogus.
In the absence of any material to show that the assessee has paid the amount of capital gain as his unaccounted income to convert the same to the exempt income, the entire transaction of sale of shares cannot be held as bogus. This issue in favour of the assessee and allow the claim of the assessee. The orders of the authorities below qua this issue are set aside. - Decided in favour of assessee.
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2018 (4) TMI 1838
Grant of Redemption of advance authorization - non-fulfilment of export obligation - It is submitted that the fact of use of inputs imported against the advance authorization for use in the manufacture and supply of finished goods to the SEZ unit is not disputed and stands proved by the alternative documents submitted by the petitioner thus meriting redemption of advance authorization - HELD THAT:- The consumption certificate placed on record by the petitioner before the RA as well as the Policy Relaxation Committee has not been properly appreciated. The said consumption certificate indicates the details of consumption namely, the supplier name, consignee name, customer LOA No./PO No., SEZ notification number and date, corelates with the SEZ notification number and the advance license number and date. In the backdrop of these documents, RA as well as the Policy Relaxation Committee would have examined the consumption certificate/‘Certificate of Receipt of Supply’ to ascertain the genuineness of the discharge of the export obligation more particularly, the statutory authorities namely, the Range Superintendent of Central Excise and the Development Commissioner, SEZ have appended their signature on these certificates. These Statutory Authorities would not have appended their signature and allowed the endorsement or the affixation of a stamp, unless they were satisfied that these are the very ARE-1 forms issued at the relevant point of time which co-related with advance authorization and its number and date.
On examining these consumption certificates, the Authorities could have condoned requirements of generating the bill of export and raising an objection that ARE-1 forms submitted without the number and date, would be hyper-technical. In the circumstances of the case where substantial material was placed on record to establish the factum of the export as contemplated under the Act and Rules or in other words, complying with the requirement contemplated under the Act and Rules, supplying the goods from the domestic tariff area to SEZ, considered to be equivalent to an export of goods physically from this country to abroad requires consideration.
The ‘Certificate of Receipt of Supply’ duly certified and stamped/ endorsed by the Statutory Authorities would have been appreciated by the Policy Relaxation Committee - respondent No. 4 to grant the necessary relaxation - the impugned orders of the Policy Relaxation Committee cannot be held to be sustainable - Petition allowed.
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2018 (4) TMI 1837
TP Adjustment - arm’s length price in respect of international transactions of Intra group services relating to external commercial borrowings - action of the DVO in upholding the 20% of agency fee and interest income earned by the overseas branch - receipt of sales credited relating to derivatives on cost plus margins of 72.94% earned by assessee, which was more than 25% earned by comparable price - HELD THAT:- As decided in own case the Appellant has made a proper transfer pricing study and has applied TNM method. As could not find any grounds to reject the Transfer Pricing Study made by the Appellant. It is also to be appreciated that the prices are fixed on the basis of the Global Transfer Policy - cost plus mark for the services rendered is far higher than the comparable transactions. My predecessor has considered the issue in assessment year 2004-05, 2005-06 and 2006-07 and has deleted the addition recommended by the TPO. The same ground has also been upheld by my order for AY 2007-08 - price charged by the Appellant's branch in India is at arm's length price. No reason to deviate from my earlier order and hence, the TP adjustments made by the AO with regard to the derivative products are deleted. The AO is directed to delete the addition made in this regard. - Decided in favour of assessee.
Transaction relating to money deposits by placing reliance on I.T. Rules 10A(d) - while applying CUP method of ALP determination each such transaction could be evaluated/ benchmarked separately - HELD THAT:- As decided in Audco India [2010 (11) TMI 769 - ITAT MUMBAI] keeping in view that the difference between the sale of L&T LLC and Arm's Length Price is only 3.35% which is well within the limit of 5%, we are inclined to uphold the finding of the ld. CIT(A) in deleting the addition made by the Assessing Officer. The ground taken by the revenue is, therefore, rejected
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2018 (4) TMI 1836
Freezing of Bank Accounts of the Municipality - HELD THAT:- There are considerable force in the submissions of the Learned Counsel for the petitioner and therefore, even though the Learned Standing Counsel for the respondents vehemently objects to this prayer, I am of the firm view that it is not proper to allow the respondents to freeze the accounts of the Municipality specially when the Municipality is engaged in several activities that involve the general public.
Ext. P9 is stayed to the extent to which the Deputy Commissioner has ordered that the accounts of the Municipality, with the fourth respondent bank, be frozen - the fourth respondent will permit the operation of the accounts by the Municipality as is routinely done without in any manner being governed by Ext. P9 order.
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2018 (4) TMI 1835
TPA Computation - comparable selection - rejection of the comparable Continental Valves Ltd., on account of failing low turnover filter of ₹ 5 crore applied by Ld. TPO - HELD THAT:- On verification of profit and loss account of this comparable it is observed that purchase of raw materials constitute materials consumed in production process and not for trading process which establishes this comparable to be engaged in carrying out manufacturing activity only. Further from TPO order passed by Ld.TPO for assessment year 2011-12, as well as DRP for assessment year 2012-13 it is observed that this comparable has been accepted during these assessment years.
On perusal of the order by Ld.TPO for the year under consideration it is observed that he has nowhere disputed functional dissimilarity of this comparable with that of assessee. Even for the year under consideration this company is carrying on with similar manufacturing activity.
No reason to reject this comparable from the final list more so when it has already been accepted by the authorities below in the immediately preceding assessment years which has not been disputed by the revenue authorities before this Tribunal - we direct Ld.TPO to consider this comparable in the final list.
Yuken India Ltd - This company is engaged in manufacture of oil hydraulic equipment and the product range of this company includes power units- Parison controller, cylinders and Piston accumulators. Thus broadly it is into manufacturing activity and with TNMM as MAM to determine ALP, broad functional dissimilarities get automatically adjusted. Accordingly this comparable is directed to be included in final list of comparables. Appropriate working capital adjustment may be granted to assessee.
WIPL Ltd - Merely because this company is having a huge turnover and is submitted to be having its own R& D wing, cannot make it functionally dissimilar, more so when TNMM is used as the most appropriate method. This was what Ld.AR submitted while arguing comparability in case of Continental Valves Ltd. We are inclined to set aside this comparable back to Ld.TPO for due verification of functional similarities/dissimilarity of this company with that of assessee. Assessee is directed to provide entire company profile along with its full financials to Ld. TPO for the year under consideration.
Dynamatic Technologies Ltd. - We are unable to verify the functional comparability of this company with assessee due to insufficient materials regarding this comparable. However from observations of Ld. TPO we observe that this company is into manufacturing activity of engineering products with huge turnover - set aside this comparable back to Ld.TPO for due verification.
Comparability based upon turnover being a relevant factor - WIPL Ltd., & Dynamatic Technologies argued for exclusion due to high turnover - We do not have before us financials and complete functional profile of these comparables in the paper book and are unable to ascertain authenticity of arguments advanced by Ld.AR. - unable to ascertain whether there are any segmental information in respect of manufacturing segment undertaken by these comparables and the risk assumed by these comparables to be compared with that of assessee, which is an important factor that could affect the turnover of companies. TPO shall verify from the records placed by assessee as directed hereinabove - direct Ld.TPO to decide comparability of these companies, with that of assessee by taking into consideration observations made in the case of CIT vs. Agnity India Technologies Pvt. Ltd.. [2013 (7) TMI 696 - DELHI HIGH COURT].
PLI computation - considering foreign exchange gain/loss, as operating item and provision for bad debts and bank charges/fixed interest as non-operating expenses for the purpose of computing PLI of assessee as well as that of comparables - HELD THAT:- It is observed that Ld. AO has failed to follow directions of DRP and has computed incorrect PLI of comparables. This is evident from order passed by Ld. TPO under section 154. We also direct Ld. TPO to provide the computation of PLI in respect of the comparables to assessee in the interest of principle of natural justice. This ground raised by assessee stands allowed for statistical purposes.
Incorrect calculation of operating cost and operating revenue of assessee - HELD THAT:- TPO is directed to look into the computation and adopt correct figures as per law. Assessee is thus directed to provide all necessary details for purposes of computing the value of international transaction as per law.
Considering the proportionate transfer pricing adjustment made by assessee suo moto in the return of income - HELD THAT:- We agree with the proposition made by Ld.AR regarding restricting adjustment to ₹ 56,10,222/- suo moto offered by assessee, in the event adjustment to be recomputed by Ld. TPO/AO (as per the directions hereinabove) is less than ₹ 56,10,222/-. - Decided in favour of assessee.
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2018 (4) TMI 1834
Rejection of declaration made under the Voluntary Compliance Encouragement Scheme, 2013 - dispute in declaration of tax dues - application was rejected on the ground that, as on the date of declaration for the period from October 2007 to December 2012, in relation to ‘construction of residential complex’ proceedings had been initiated on 1st March 2013 against them - HELD THAT:- It is seen that Circular No. 170/5/2013-S.T., dated 8th August, 2013 clarified that there was no bar on filing of declaration by an assessee against whom an inquiry, investigation or audit has been initiated after 1st March 2013.
It is seen from the records that the show cause notice was issued only on the 18th of August 2015 and that notice proposing rejection should have been issued within 30 days of the filing of the declaration. As the competent authority itself had not complied with the conditions prescribed in the scheme, the rejection of the declaration made is erroneous.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1833
Deduction u/s 80P(2)(a)(i) - HELD THAT:- Hon’ble Supreme Court in the case of The Citizens Cooperative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] held that in order to do the business of a cooperative bank, it is imperative to have a licence from the Reserve Bank of India. It can therefore be said that a co-operative society which does not possess a license from RBI cannot be equated to a co-operative Bank, even though it might indulge in the business of banking.
We find force in the submissions of ld. AR of assessee because we find that the facts of the present case and the facts of that case i.e. The Citizen Co-operative Society Ltd. Vs. ACIT(supra) are not discussed we set aside the order of CIT (A) and restore the matter back to his file for fresh decision by way of a speaking and reasoned order - Appeal of the revenue is allowed for statistical purposes.
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2018 (4) TMI 1832
Deduction u/s. 80P(2)(a)(i) - HELD THAT:- Hon’ble Supreme Court in the case of The Citizens Cooperative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] held that in order to do the business of a cooperative bank, it is imperative to have a licence from the Reserve Bank of India. It can therefore be said that a co-operative society which does not possess a license from RBI cannot be equated to a co-operative Bank, even though it might indulge in the business of banking.
We find force in the submissions of ld. AR of assessee because we find that the facts of the present case and the facts of that case i.e. The Citizen Co-operative Society Ltd. Vs. ACIT(supra) are not discussed and compared by ld. CIT(A) in the impugned order. Before following any judgment, the facts of the case on hand and facts of that case should be discussed and compared and since this was not done by CIT(A), we set aside the order of CIT (A) and restore the matter back to his file for fresh decision by way of a speaking and reasoned order - Appeal of the revenue is allowed for statistical purposes.
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2018 (4) TMI 1831
Assessment of trust - Assessment in hands of the beneficiaries - Whether income from deposit was not correctly admitted in the hands of the beneficiaries or not admitted, it has to be assessed in the hands of the assessee trust? - HELD THAT:- Observation of the AO in the show cause notice that the intention of the ITAT is to grant relief only in respect of interest income which is offered for taxation by the beneficiaries is not correct. This Tribunal is of the considered opinion that the intention of the ITAT in the order [2017 (6) TMI 1331 - ITAT CHENNAI] is in respect of the entire income received from various sources and distributed to investors has to be taxed as such in the hands of the beneficiaries, therefore, there is no need for any exclusion in respect of the income admitted by the beneficiaries or not admitted by the beneficiaries.
Since the details of the income and expenditure is not available in the Profit & Loss account or in the document filed before this Tribunal, this Tribunal remitted back the matter to the file of the Assessing Officer for a limited verification to collect information from beneficiaries and allow pass through status in the hands of the assessee.
AO misunderstood the direction of the Tribunal by picking up same words here and there. Hence, this Tribunal is of the considered opinion that the Assessing Officer is not correct in saying that in case the income is not admitted / incorrectly admitted, it has to be assessed in the hands of the assessee. This Tribunal is of the considered opinion that whether the income is admitted by the respective beneficiaries or not, since pass through status was given to the assessee-Fund, the entire income has to be assessed only in the hands of the beneficiaries and not in the hands of the trust / Fund. The order of this Tribunal is modified / clarified accordingly.
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9911796707
