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Showing 161 to 180 of 2041 Records
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2017 (9) TMI 1886
Bogus purchases - Addition based on information received from the Sales tax department - CIT(A) sustained the rate of 12.50%, but the directed the AO to reduce the GP already declared by the assessee on the impugned purchases - HELD THAT:- As perused the order passed by the division bench in the assessee’s own case for AY 2009-10 [2017 (5) TMI 1101 - ITAT MUMBAI]. Since the facts are identical, consistent with the view taken therein, modify the order passed by Ld CIT(A) and direct the AO to restrict the addition to 2% of the value of alleged bogus purchases. Appeal filed by the assessee is partly allowed.
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2017 (9) TMI 1885
Deduction u/s 10AA - activity of the assessee is manufacturing OR not ? - assessee is a firm engaged in the business of manufacture and exporting of Pulverized garnet abrasive grit - CIT-A allowed the claim - HELD THAT:- SEZ Authorities has recognized the SEZ unit of the assessee and also held that the activity of the assessee is manufacturing as per the SEZ Act - materials exported by the assessee consisting of 50% grade is also not in dispute.
SEZ Authorities had also certified that assessee’s SEZ unit has commenced production on 29.02.2012 and this establishes the fact that the pre-fabricated building of the assessee was completed earlier to 29.02.2012. AO could not establish that the assessee had formed its SEZ unit by splitting up or by reconstruction with cogent evidence.
AO has also accepted that the assessee’s unit processed the raw materials by removing 10 to 20% of the impurities. The comparison of the market price and invoice price by the Ld.AO were proved to be incorrect because the price of the finished product was stated as ₹ 15,269/- in the year book 2013 while as the appellant has sold the same at the price of ₹ 17,098/-. AO could also not establish that the assessee had suppressed the purchase cost of semi-furnished goods in order to claim higher deduction U/s.10AA - certificates issued by the concerned officers of the SEZ unit could not be proved to be not genuine. CIT(A) had made a categorical finding on all the above stated facts and the Ld.DR could not convincingly argue or disprove the findings of the Ld.CIT(A) - we hereby sustain the order of the Ld.CIT(A) on merits. - Decided against revenue.
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2017 (9) TMI 1884
Levy of interest u/s. 234B and interest u/s. 234C - search and seizure action on the assessee u/s. 132 - Revenue adjusted the seized cash against the regular tax demand - inclusion of the advance tax liabilities within the meaning of the 'existing liabilities' as used in the provision to section 132 B of the Act read with its Explanation- 2 to said section for the period prior to the amendment - HELD THAT:- Assessee has taken this issue to the judicial forum which eventually decided issue in favour of the assessee, and the judgment in the case of Spaze Towers (P.) Ltd. [2016 (11) TMI 1401 - PUNJAB AND HARYANA HIGH COURT] has brought requisite clarity on the issue. Therefore, for the period prior to the amendment, the 'existing liability' includes the "advance tax liability" in accordance with the provisions of part C of chapter XVII of the Act.
Subsequently, accepting the above judgment, the CBDT issued direction to Field Officers by way Circular No.20/2017 dated 12/06/2017. Therefore, the issue is now settled and the expression 'any existing liabilities' does include the advance tax liabilities prior to 01.06.2013. The case of the assessee falls prior to the said date of 01.06.2013. The cash was seized in the search initiated on 06.01.2010. Assessee requested for adjustment of the same towards the advance tax liabilities vide his letter dated 11.03.2010. Considering the above legal position in the matter and facts of the present case, we are of the opinion, the Ground Nos. 1 to 3 raised by the assessee have to be decided in his favour and against the Revenue.
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2017 (9) TMI 1883
Admiralty Law - arrest of vessel - maritime claim - HELD THAT:- Section 12 states that the Code of Civil Procedure is to apply in all proceedings before the High Court insofar as it is not inconsistent or contrary to the provisions of the Act. By Section 17, the Admiralty Court Acts of 1840 and 1861 and the Colonial Courts of Admiralty Acts of 1890 and 1891 stand repealed. Also, the Letters Patent of 1865, insofar as it applies to the admiralty jurisdiction of the Bombay, Calcutta and Madras High Courts, also stands repealed - An admiralty action in the courts of India commences against a vessel to enforce what is called a "maritime claim". Though India is not a signatory to the Brussels Convention of 1952, a long list of maritime claims is given in Article 1 thereof. Suffice it to say that Sub-clause (k) of Article 1 states that important materials wherever supplied to a ship for her operation or maintenance would fall within the definition of a maritime claim. A maritime lien, on the other hand, attaches to the property of the vessel whenever the cause of action arises, and travels with the vessel and subsists whenever and wherever the action may be commenced.
A claim for necessaries supplied to a vessel does not become a maritime lien which attaches to the vessel.
The High Court was not correct in its view that it was proved by Respondent No. 1 that sale had taken place in April, 2000 by Fairsteel Corporation to Respondent No. 1 by which Respondent No. 1 became the owner of the vessel. It is clear, therefore, that Respondent No. 1 has failed to prove that there was a change of ownership of the vessel in its favour on the date of arrest i.e. on 2.5.2000 - The suit succeeds.
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2017 (9) TMI 1882
Disallowance u/s 14A r.w. Rule 8D2(iii) in the normal computation of income - assessee before us contends that only those investments which yielded dividend income during the year should be considered for computing the disallowance Rule 8D2(iii) r.w.s 14A - HELD THAT:- As decided in own case [2017 (9) TMI 655 - ITAT MUMBAI] relying on VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] we restore this issue to the file of the Assessing Officer with a direction to recompute the disallowance under Rule 8D2(iii) by considering only those investments which yielded dividend income during the Assessment Year 2008-09. This ground of appeal is allowed for statistical purpose.
Disallowance made u/s 14A while computing the book profits u/s 115 JB - HELD THAT:- We direct the Assessing Officer to compute the book profits in accordance with directions of the Hon'ble Special Bench in the case of ACIT v. Vireet Investments Private Limited (supra).
Disallowance under 115JB for working out book profits as adopted by the Assessing Officer u/s 14A of the Act - HELD THAT:- Ground of appeal is restored to the file of the Assessing Officer to compute the book profits u/s 115JB in view of the decision of the Delhi Special Bench in the case of ACIT v. Vireet Investments Private Limited (supra) wherein it has been held that computation under Clause(f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w. Rule 8D of I.T. Rules.
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2017 (9) TMI 1881
TP Adjustment - selection of TNMM method as Most Appropriate Method - Comaparability - capacity utilization - TPO has rejected the three comparables on the premise that the assessee has not furnished the details, though said information was ascertainable and discernable from the record reproduced hereinabove but the TP Officer, has rejected the three comparables on the premises that the capacity utilization figures of production as well as of the installed capacity are not available in the same units - HELD THAT:- Firstly if the TPO is rejecting three comparables on account of non availability of the capacity utilization and installed capacity in the same unit, it does not debar the TPO from using his powers under the Act. TPO is duty bound to move a step forward and issue a notice under Section 133 to seek the information of capacity utilization of installed as well as production in the same unit which is not done by the TPO. TPO was under obligation in law to conduct his own TP study , if rejected the three comparable were rejected by him by bringing more comparable which are comparable with the profile of the assessee.
That exercise of bring more comparables in the form of TP study had not been done by TPO and TPO had determined the ALP adjustment based on only one comparable and further notice under section 133 were not issued to the comparables for seeking the necessary information’s on capacity utilization . The case in hand is not one case, where it is not possible for TPO to find out the other suitable comparable after rejecting the comparables of the assessee. But no efforts were made by the TPO to find out the more comparable so as to make the ALP adjustment based on mean profit margin of the comparables. In our view, the making adjustment on the basis of standalone comparable is not a healthy practice, unless the comparable available is internal one and is therefore required to be dissuaded.
Adjustment made by the TPO on the basis of one comparable is not sustainable in the eye of law and accordingly we have no hesitation to reject the orders passed by lower authorities however we deem it appropriate to direct the TPO to conduct a fresh TP study after taking into consideration the above said observation and also the profile of the assessee. Accordingly, this issue is decided in favour of the assessee for the statistical purposes and entire TP grounds are remanded back to the file of TPO.
Depreciation policy adopted by the appellant viz a viz the comparable - appellant advocated an alternative approach of considering cash profit upon sales margin (PBDIT/Sales) as the PLI wherein the depreciaton cost would be taken out from the computation of PBDIT - HELD THAT:- We are remanding back the TP issue to be the file of the Transfer Pricing Officer for conducting the fresh TP study after searching the fresh comparables in accordance with law, therefore no purpose would be served to adjudicate the present ground as it will be of academic in nature. Accordingly this ground is dismissed as being infructuous.
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2017 (9) TMI 1880
The Supreme Court of India dismissed the special leave petition as they found no ground to interfere. Pending application, if any, stands disposed of.
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2017 (9) TMI 1879
Status of a Secured Creditor in the committee of Creditor - effect on Corporate Debtor - it was submitted that the Insolvency Resolution Professional has opposed the continuity of 'Exim Bank' as one of the creditor - HELD THAT:- While we are of the view that appeal at the instance of 'Corporate Debtor' is not maintainable, but make it clear that the Resolution Professional has right to oppose induction of a third party as a creditor. However, in view of the fact that the Exim Bank has been provisionally permitted to continue as a member of the Committee of Creditors and final order is yet to be passed by the Adjudicating Authority, Allahabad Bench and time has been granted to the contesting party to file rejoinder, we are not expressing any view at this stage.
It is expected that the Adjudicating Authority will decide the question of continuity of 'Exim Bank' as a member of the Committee of Creditors either way and will not continue with interim arrangement for days together. An early decision be taken on production of copy of this order.
Appeal disposed off.
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2017 (9) TMI 1878
Invocation of Performance Bank Guarantee - decree of permanent injunction restraining Defendant from making payment - fraudulent invocation of Bank Guarantee - HELD THAT:- It is settled that if the cause of action has taken place in India and the Indian law applies, the parties cannot choose to vest territorial jurisdiction to try the suit in a Court which does not have the jurisdiction though they may agree to vest exclusive jurisdiction in one of such Court having jurisdiction, however, where one party is not subject to the law of India, the parties may vest jurisdiction outside the country in a neutral forum as has been done in the present case. The cause of action in the present case does not arise by virtue of the omnibus agreement between BHEL and BoB as there is no prayer in respect of the omnibus agreement to be enforced or violation thereof alleged but of the Counter Guarantee and the Performance Bank Guarantee which both vest jurisdiction in Courts outside India.
As per the pleadings in the plaint, the plea taken by BHEL is not of expense or procedure or the law of England being different or that conditions are such that BHEL cannot proceed against the parties at London but is paucity of time which is not one of the grounds recognized. Even if this Court accepts that paucity of time is one of the grounds, time can be granted to BHEL to approach the Court of competent jurisdiction.
Even though learned counsel for AKBank harps on the admissions made by BHEL in the plaint that the Commercial Court at London has the exclusive jurisdiction to try the suit and the present suit was filed only because of paucity of time for BHEL to approach the Court of competent jurisdiction, dehors the admission of BHEL this Court finds that it has no territorial jurisdiction to entertain the present suit, for it is well settled that contract of Bank Guarantee is an independent contract and merely because the same was issued at the place within the territorial jurisdiction of this Court and that the word 'only' is missing from the Counter Bank Guarantee clause, the same would not vest this Court with the territorial jurisdiction to entertain the plaint.
The plaint is directed to be returned to be filed in the Court of competent jurisdiction however, since there is an ad-interim order in favour of BHEL since 10th March, 2017 and it would take some time for BHEL to approach the Court of competent jurisdiction the interim order dated 10th March, 2017 is extended for a further period of 45 days so that BHEL can approach the Court of competent jurisdiction - Application dismissed.
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2017 (9) TMI 1877
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - dispute in existence - HELD THAT:- There is an existence of dispute with regard to supply of goods and materials. In spite of notice under section 433(e) and 434(1)(a) of the Companies Act, 1956, and receipt of reply, no steps was taken by the appellant. Much thereafter, application for initiation of 'Corporate Insolvency Resolution Process' was filed - there are no reason to interfere with the impugned order wherein the Adjudicating Authority held that there is an 'existence of dispute'
Appeal dismissed.
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2017 (9) TMI 1876
CENVAT Credit - input services - Air Travel Agent Service - Tour Operator’s Service - Courier Service - Cleaning Service - Life Insurance of the employees - Mandap Keeper Service - GTA Service - HELD THAT:- The respective services have been held to be ‘Input service’ as defined under Rule 2(l) of CCR, 2004 in various services, and accordingly, the service tax paid on these services is admissible to credit. However, in the case of credit of service tax paid on the GTA Service, it is necessary to ascertain the from the condition of sale, whether the place of removal is at the factory or at customer’s premises, before allowing the credit - reliance can be placed in the case of Principal Commissioner vs. Essar Oil Ltd [2015 (12) TMI 1062 - GUJARAT HIGH COURT], Haldyn Glass Ltd. & Ors. Vs. C.C.E & S.T - Vadodara-II [2017 (8) TMI 1217 - CESTAT AHMEDABAD] and Birla Corporation Limited vs. Commissioner of Central Excise, Bhopal [2014 (1) TMI 148 - CESTAT NEW DELHI].
For ascertain the said fact the matter remanded to the adjudicating authority - Appeal allowed by way of remand.
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2017 (9) TMI 1875
Issues:
1. Interlocutory applications for intervention
2. Bail application related to pending FIR
3. Deposit of money before the Registry
4. Possession of flats and refund of money for consumers
5. Appointment of Amicus Curiae
6. Listing of the matter
Interlocutory Applications for Intervention:
The Supreme Court allowed the interlocutory applications for intervention in the case. The court heard the counsel for the petitioners and provided directions regarding the FIR and bail application arising from it. The petitioners were directed to deposit a specific sum of money before the Registry, which they complied with by depositing an increased amount. Some consumers were interested in taking possession of flats, while others preferred refunds. The court decided not to delve into the allocation of plots at that moment.
Bail Application Related to Pending FIR:
The bail application in question arose from an FIR pending before the High Court, where the prayer for interim bail had been rejected. The petitioners were directed to deposit a substantial sum of money before the Supreme Court's Registry, which they did. The court acknowledged the varying preferences of consumers regarding possession of flats or refunds without discussing the allocation of plots.
Deposit of Money Before the Registry:
The petitioners were required to deposit a significant amount of money before the Registry of the Supreme Court, as per the court's order. The deposited amount exceeded the initially specified sum. The court noted the consumers' differing preferences regarding possession of flats and refunds but refrained from addressing plot allocations at that time.
Possession of Flats and Refund of Money for Consumers:
Consumers had differing preferences, with some wanting possession of flats upon completion and others seeking refunds. The court did not engage in discussions about plot allocations but focused on the consumers' choices. The court emphasized the need for clarity in communication for consumers desiring flats, requiring them to inform the appointed Amicus Curiae through a letter supported by an affidavit.
Appointment of Amicus Curiae:
The court appointed Mr. Pawan Shree Agarwal as Amicus Curiae to oversee the case. The Amicus Curiae was tasked with compiling details of all projects involving the petitioners, including consumer names and deposited amounts project-wise. Additionally, the Amicus Curiae, in consultation with the petitioners' counsel, was instructed to determine the exact refund amounts required. Consumers interested in obtaining flats were directed to communicate their intentions clearly to the Amicus Curiae to avoid confusion.
Listing of the Matter:
The court scheduled the matter to be listed on 15th September 2017 for further proceedings. The decision to appoint an Amicus Curiae and the directions regarding consumer preferences for possession or refunds were key aspects addressed in the judgment.
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2017 (9) TMI 1874
Actual monetary benefits of grant of 1st and 2nd Assured Career Progression Scheme (ACP Scheme) - payment of arrears of such benefits - passing of examination as required under Rule 21(1) of the Bihar Civil Court Staff (Class-III and Class-IV) Rules, 1998, for availing such benefit - HELD THAT:- In the absence of holding of departmental examination denying the benefit of ACP to the appellant will amount to taking advantage of own default. It is elementary principle of law that one cannot take advantage of its own cause - In All India Groundnut Syndicate vs. Commissioner of Income Tax [1953 (9) TMI 19 - BOMBAY HIGH COURT] Hon'ble Mr. Justice Chagla, Chief Justice has laid down the principle that one cannot take advantage of his own default.
Thus, the appellant cannot be made to suffer on account of non-holding of examination by the respondents and the appellant is entitled to grant of the benefit under ACP Scheme treating the appellant to have passed the departmental examination with effect from the date the Scheme of ACP was introduced, firstly on the ground that Civil Court Rules was framed in 1998 wherein the requirement of passing departmental examination was introduced and secondly that in the very first departmental examination held on 29.6.2003 the appellant was declared successful.
Appeal allowed.
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2017 (9) TMI 1873
Recovery of electricity bills in respect of the business premises during moratorium period - HELD THAT:- Arrears of electricity bills, shall be paid entirely within a period of 2 months in instalments but immediately after receipt of refund from the Bank. It was contended by the representative of the Corporate Debtor that provision with regard to the outstanding electricity charges has been made in the resolution plan already submitted. However, the Resolution Applicant may have to file an amended resolution plan.
Tagging being made by the lead Bank i.e. Punjab National Bank which is still being deducted - HELD THAT:- Section 14(1) (a) and (c) of the Code prohibits even the execution of decree against the Corporate Debtor. The aforesaid recovery should rather have not been made by the Bank by tagging 5% of the amount being deposited on behalf of the Corporate Debtor in TRA account with effect from the date of commencement of the resolution process i.e. the day of admission of the application.
The Punjab National bank is directed to refund the amount recovered under this letter after commencement of the insolvency process in the account of the Corporate Debtor within two weeks - Application allowed.
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2017 (9) TMI 1872
Nature of receipt - sales tax subsidy - revenue or capital receipt - HELD THAT:- There is no doubt about the principles governing the subsidies-if the subsidy is in the field of setting up of a business or for capital goods it has to be considered a capital receipt or same has to be taxed as revenue receipt. The said broad categorisation is applicable to all kind of subsidies. As the various schemes announced by the state government from time to time lay down different conditions for availing the incentive schemes, so, without analysing the scheme, as a whole, no final conclusion can be drawn. Considering the peculiar facts and circumstances of the case, we are of the opinion, that in the interest of justice matter should be restored back to the file of the AO for fresh adjudication. He is directed to compare the scheme deliberated upon by the Tribunal in the case of RIL and the scheme of 1993 applicable for the year under appeal. He would afford a reasonable opportunity of hearing to the assessee. First Ground of appeal is decided in favour of the assessee, in part.
Income under the head capital gains from sale of plot of land at Mulund - applicability of provisions of section 50 - HELD THAT:- Following the judgment of the Hon'ble Bombay High Court in the case of Heatex Products [2016 (7) TMI 1393 - BOMBAY HIGH COURT] the Tribunal decided the issue in favour of the assessee held provisions of Section 50C would apply only to capital assets being land or building or both and it could not be applied to transfer of lease hold rights in land.
Not referring the matter to the DVO for determining the market value of the assets - we hold that the FAA had not interpreted the provisions of section 50(2) of the Act correctly, that the AO should have referred that matter to the DVO.
FMV of the land as on 01.04.1982 - A perusal of the Indian Valuers Directory and Reference Book (Pg. 340 of the PB) reveal that the market value of land located in the adjoining areas of Mulund on 01.04.1981 was ₹ 400-480/- per Sq. feet. Tribunal, in the case of Kumar K Chabaria [2010 (2) TMI 1252 - ITAT, MUMBAI] has considered the said Reference Book as a reliable source for valuation of capital assets. So, in our opinion, FMV adopted by the assessee as on 01.04.1981 cannot be brushed aside-rather it is quite reasonable.
Reference to the DVO u/s. 55A of the Act is concerned, we would like to say that after the judgments of the Hon'ble Bombay High Court in the cases of Daulal Mohta (360 ITR 680) and Pooja Prints (360 ITR 697) there is no doubt that the AO cannot make a reference to the DVO for purpose of valuation, where the value of the property, declared by the assessee, is not less than FMV. In other words reference u/s. 55A of the Act can only be made in cases where the value of capital asset shown by an assessee is less than the FMV of the land. In the case under consideration, the value shown the assessee is more than the FMV and therefore there was no justification for making a reference to the Valuation Cell. Besides, the AO had made the reference after the assessment was over. In short, in our opinion the FAA was not justified in endorsing the views of the AO. Considering the above, grounds No. 2-5 are decided in favour of the assessee.
Entitlement of deduction u/s. 54G - Assessee, in the case under consideration, had entered in to an agreement with a developer for selling rights in the plots of land. But, the agreement was cancelled later on due to differences between the assessee and the developer. It found a new developer and sold the specified assets resulting in accruing of capital gains. There is no doubt that after receiving the sale proceeds from the developer, the assessee had invested the money in purchasing P&M and part of it was deposited in a designated bank account. P & M purchased by it at the time of shifting the premises had nothing to do with the new P & M acquired after sale of capital assets. There is no precondition in the section that new machinery should be purchased at the time of shifting of industrial undertaking. No undertaking can function without P & M. But, the assessee can purchase machinery even after shifting and commissioning of business from the new premises. Expansion of business can take place any time. Generally, shifting of industrial unit from urban to rural areas take place simultaneously. But, in a few cases, there can be time lag between shifting of unit and receipt of capital gains. In such cases what is be considered is sale of assets and receipt of capital gains - we are of the opinion that the AO and the FAA had wrongly denied the benefit of the section 54 G of the Act to the assessee.
Sale of right of the plot of land - As per the assessee the AO had erroneously reduced the area of assets sold by it. It was also argued that there was a mistake in determining the proportionate cost of improvement calculation - HELD THAT:- AR argued that the AO and FAA erroneously reduced the area of assets sold, that there was error in calculation of proportionate cost of improvement, that it had sold development rights in land and not the land itself, that the area to be considered had to be measured in terms of FSI and not area of land, that the AO should have considered FSI potential of 7.08 lakhs sq. ft. for computing the cost in the hands of the assessee, that in the development agreement it had mentioned that saleable land was 6.38 lakhs sq.ft., that the FAA had reduced the cost of acquisition and cost of improvement - both these facts needs further verification on part of the AO. So, in the interest of justice we direct the AO to decide both the issue afresh. He is directed to consider all the facts and figures produced by it, before us, during the appellate proceedings. Both the grounds stand partly allowed.
Ad hoc disallowance of various expenses - HELD THAT:- Disallowances in question is made on an ad hoc basis merely on the ground that there would be a possibility that some of the expenses would have not been incurred. The Assessee provided complete break up of all the details in the course of assessment proceedings and also an extract of the ledger account in respect of the details provided. The assessing officer has not asked for any specific detail or proof in the nature of any particular bill from the assessee during the assessment proceedings. No explanation regarding allowability or reasonableness of the expenses was asked for during the course of assessment proceedings. On this factual matrix, we hold that the ad hoc disallowance is nothing but a sheer surmise and such disallowance cannot be sustained.
Disallowance of provision for leave encashment - HELD THAT:- We find that the FAA has not adjudicated the issue, though a specific ground was raised before him with regard to provision for leave encashment. As per the Hon'ble Bombay High Court additional claim can be raised before the appellate authorities Pruthvi Brokers and Shareholders Private Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] . Therefore, we are of the opinion matter should be restored back to the file of the FAA for fresh adjudication, who would decide the issue after affording a reasonable opportunity of hearing to the assessee and after considering the cases relied upon before us. Fifth ground of appeal is allowed in favour of the assessee, in part.
Deduction in respect of provision for leave encashment - HELD THAT:- We find that the assessee had made the claim as per the judgment of the Calcutta High Court that was late on stayed by the Hon'ble Apex Court. As far as the matters of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] and Aditya Birla Nuvo Ltd. , [2014 (8) TMI 1032 - ITAT MUMBAI] are concerned, we will like to mention that both did not have benefit of the judgment of the Hon'ble Supreme Court in the case of Exide Industries Ltd. [2007 (6) TMI 175 - CALCUTTA HIGH COURT] - Therefore, in our opinion, the order of the FAA does not suffer from any legal or factual infirmity. Confirming the same, we decide first ground of appeal, against the assessee
Additional depreciation u/s. 32(1)(iia) in respect of eligible plant and machinery required and store during the F.Y. 2005-06 - HELD THAT:- only objection of the AO is that the provisions refer to "new machinery or plant" and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to use. In our view this stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/s. 32(1)(iia) and not new in subsequent years. The expression "new machinery" is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01.04.2006. The plain language of the section warrants such an interpretation. - Decided against revenue
Not allowing foreign exchange fluctuation loss incurred by assessee in respect of currency swap and derivative transactions - HELD THAT:- During the year under consideration the assessee had accounted for foreign exchange loss of ₹ 350.18 lakhs, that it was net of foreign exchange gain, that the loss mainly comprised of swap loss of ₹ 493.50 lakhs, that the assessee was consistently booking loss or gain on Foreign exchange on the basis of the foreign exchange rate as on the last date of particular year. In the subsequent year i.e. AY 2011-12 when the assessee had shown surplus the AO had taxed the same. In our opinion the AO should follow uniform policy for taxing or not taxing the foreign exchange loss/gains. If gains are to be taxed of a particular transaction the losses arising out of same cannot be denied to the assessee. The AO/FAA has not commented upon the fact that assessee was following AS-11. Considering the above, we are of the opinion that FAA was not justified in confirming the order of the AO. Ground decided in favour of the assessee.
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2017 (9) TMI 1871
Income from undisclosed sources - when the assessee has never disclosed four such bank accounts to the department, even in the statement recorded u/s.131 by the AO - HELD THAT:- CIT(A) observed that he has gone through the bank account and other documents and found the submission of the assessee to be correct. He observed that the assessee has paid the amounts to M/s. Reeva (P) Ltd. for purchase of a flat at Sirdi in the name of Smt Archana Samal. This shows that the assessee’s account was used for transactions on behalf of his sister Smt Archana Samal and the payments made by the assessee for the property in the name of Smt Archana Samal are sourced from Smt. Samal. Smt. Samal is assessed to tax and return filed for the Assessment year 2010-11 shows returned income of ₹ 37,75,150/-. Therefore, the CIT(A) held that the submission of the assessee that an amount of ₹ 14 lacs was received from Smt. Samal in cash and deposited in the HDFC Bank account from which Cheque/DD/cash was paid for purchase of the property in the name of Smt. Samal is credible and acceptable. Hence, he held that the source of deposit of ₹ 14 lakh out of ₹ 25,31,686/-, is explained and deleted the addition to the extent of ₹ 14 lakhs and sustained balance amount of ₹ 11,31,686/-.
D.R. though supported the order of the Assessing Officer has brought no positive and credible material on record to controvert the findings of the CIT(A) who after appreciating all the facts of the case deleted the addition of ₹ 15 lakhs. In the circumstances, we find no good reason to interfere with the order of the CIT(A), which is hereby confirmed and ground of revenue is dismissed.
Addition under the head “unexplained receipts in cash/cheque - CIT (A) has himself admitted that there is a mismatch of dates in the submission made by the so-called creditor of ₹ 9,45,000/- - HELD THAT:- CIT(A) also observed that the record shows that the assessee received an amount of ₹ 10 lakhs by RTGS on 9.3.2010 from Capt Mohapatra and 22.3.2010 and cash of ₹ 12 lakhs was deposited on 31.3.2010. The bank account also shows that an amount of ₹ 11 lakhs was returned to Capt. Mohapatra by RTGS. Therefore, he held that the explanation of the assessee that ₹ 11 lakhs was received by Capt Mohapatra including cash of ₹ 1 lakh was correct. Further, Capt. Mohapatra has confirmed by filing confirmation having given amount of ₹ 11 lakhs, ₹ 10 lakhs by RTGS and ₹ 1 lakh as cash to the assessee. Therefore, he held that there is no merit in the addition and treated the sum of ₹ 11 lakhs out of ₹ 12 lakhs as explained and deleted the addition of ₹ 11 lakhs and sustained the addition of ₹ 1 lakh.
D.R. relied on the order of the Assessing Officer. He could not bring any positive material on record to controvert the above findings of the CIT(A). We find that the CIT(A) after appreciating the facts of the case in its entirety has deleted the addition. Therefore, we find no infirmity in the order of the CIT(A), which is hereby confirmed and ground of appeal of the revenue is dismissed.
Unexplained deposit in HDFC bank account - HELD THAT:- The assessee explained that ₹ 4,04,991/- was deposited out of ₹ 5,05,000/- received from Smt. Archana Samal which is part of ₹ 19,05,000/- received in cash from the assessee. Thus, it cannot be said that the assessee could not explain the source of ₹ 4,04,991/- being deposit made in HDFC Account No. 00441000124939. D.R. could not controvert the above submission of ld A.R. of the assessee by bringing any positive material on record. Therefore, we set aside the orders of lower authorities and delete the addition made as unexplained deposit in HDFC Bank and allow this ground of the appeal.
Deposits in the bank account was out of withdrawal from different banks - HELD THAT:- We find that no material was brought on record either by the Assessing Officer or by the CIT(A) after examining the details and documents filed by the assessee before lower authorities to show that the assessee did not have the amount available with it out of earlier withdrawals made from different banks for making the same as deposit in the bank account as claimed by the assessee. In absence of any such material being brought on record, we find that the lower authorities were not justified in making the addition in the hands of the assessee as unexplained deposit in bank account. Therefore, we set aside the orders of lower authorities and delete the addition and allow this ground of appeal of the assessee.
Unexplained cash deposit - HELD THAT:- D.R. could not controvert the submission of ld A.R. of the assessee that the deposit of ₹ 1 lakh in bank account was out of maturity proceeds of fixed deposit made by the assessee by withdrawal through yourself cheque from Axis Bank on 12.8.2010. Therefore, we set aside the orders of lower authorities and delete the addition of ₹ 1 lakhs and allow this ground of appeal of the assessee.
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2017 (9) TMI 1870
Travelling expenses incurred on behalf of family members of players - Disallowance of expenses holding that these persons have not rendered any service to the appellant and the expenses are private expenses of individuals unrelated to the business - HELD THAT:- We find that no evidence has been led by the assessee to substantiate the claim that the presence of spouse/family members attracts sponsors or how it is related to business of the assessee. Even in the agreement, it is no where provided that it will be the liability of the assessee to incur travelling or other expenses for the spouse or family members of the players. Thus assessee was not contractually obliged to incur any expenditure for spouses or family members of the players. CIT(A) has dealt with the above grounds after considering the facts of the present case.
No new facts have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the assessee stands dismissed.
Addition of 10% of hospitality expenses on adhoc basis by holding that the same is not related to assessee’s business - HELD THAT:- As decided in own case [2017 (8) TMI 1596 - ITAT MUMBAI] we do not find any merit for the disallowance of 10% of the hospitality expenses on adhoc basis in the hands of the assessee being a corporate entity/artificial person.
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2017 (9) TMI 1869
CENVAT Credit - common input services used for the manufacturing activity of finished goods and for the trading activities - input services - Management Consultancy Services - HELD THAT:- The provisions of Cenvat Credit Rules were amended by insertion of an explanation which indicated trading activity is an exempted services. Hon’ble High Court of Madras in the judgment of M/S. FL SMIDTH PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 699 - MADRAS HIGH COURT], settled the law that explanation inserted from 1-4-2011 will apply for the period prior to 1-4-2011 also and following the said ratio, it is held that the trading activities undertaken by the appellant during the period in question has to be treated as an exempted services - Since it is undisputed that appellant is manufacturer of excisable goods and is discharging appropriate central excise duty, the proportionate Cenvat credit attributable to the trading activity needs to be reversed and the same should be arrived based upon the provisions of Rule 6(3A) of the Cenvat Credit Rules, 2004.
CENVAT Credit - input services - Management Consultancy Services - HELD THAT:- The said sub-rule starts with a non obstante clause, which would mean that this sub-rule has to be read independently and it provides for availment entire Cenvat credit even if the same is used for manufacturing of dutiable and exempted goods and are providing taxable and exempted services. In my view, appellants have made out a case for availment of the entire Cenvat credit of the service tax paid on Management Consultancy Services as per the above reproduced sub-rule - demand set aside.
Demand of interest - HELD THAT:- Since the demands are set aside on this ground, the question of interest does not arise.
Penalty - HELD THAT:- Since the issue is of interpretation no penalty is warranted on the appellant - The penalties are set aside.
Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1868
Re-export of imported goods - baggage imported from Pakistan to India along with Cigarettes & Dupattas - applicability of section 150 of CA - HELD THAT:- After the applicant failed to comply with the condition for re-export of goods on payment of specified redemption fine, the goods stood confiscated on 5th September, 2011 and the ownership was vested with the Central Government. As a result the Attari Customs was having full authority to dispose of the said goods after 4-9-11 and no error is committed by them by disposing of the goods on 3-11-11. The applicant has heavily relied upon Section 150 of the Customs Act to assert her agreement that a prior notice to her was required before disposal of the goods. But the applicant has conveniently overlooked the significant fact that notice to the owner is to be given u/s 150 only if the goods are to be sold prior to confiscation and not after confiscation - Since in the instant case the goods were sold after confiscation thereof, section 150 is not applicable at all. Thus the applicant’s case that she was not sounded by the Customs authorities before the disposal of their goods is completely misplaced.
The Revision Application filed by the applicant is not maintainable and hence it is rejected.
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2017 (9) TMI 1867
Depreciation to assets transferred upon amalgamation from the amalgamating company by the order of the BIFR - HELD THAT:- Substantial question of law covered by our decision delivered in M/s. Ballarpur Industries Limited vrs. Commissioner of Income Tax [2017 (9) TMI 490 - BOMBAY HIGH COURT]
Disallowance of expenses in the nature of advisory fees - HELD THAT:- Issue covered by the decision of Punjab State Industrial Development Corporation Ltd. Vs. CIT [1996 (12) TMI 6 - SUPREME COURT]
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