Home Case Index All Cases Income Tax Section Wise 2018 2018 (9) This

Law	-- All -- GST Income Tax Benami Property Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws
Court	-- Any -- Supreme Court SC Orders / Highlights High Court Appellate Tribunal Tribunal Appellate authority for Advance Ruling Advance Ruling Authority National Financial Reporting Authority Competition Commission of India ANTI-PROFITEERING AUTHORITY Commission Central Government Board DISTRICT/ SESSIONS Court Commissioner / Appellate Authority Other
Citation	--Year-- 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 1963 1962 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 1951 1950 Upto 1949 - -Volume- 1 2 3 4 5 6 7 8 9 10 11 12 -
Landmark	Nil - N/A Referred in >= 2 Cases Referred in >= 4 Cases Referred in >= 5 Cases Referred in >= 10 Cases Referred in >= 15 Cases Referred in >= 25 Cases Referred in >= 50 Cases Referred in >= 100 Cases
Order by	TMI Citation Date of Decision

Advanced Search Options

Case Laws

Showing 161 to 180 of 2152 Records

• 2018 (9) TMI 1996
  

  Time Limitation - CENVAT Credit - credit denied on the premise as per Notification No. 02/14-CE (N.T) dt. 20.01.2014, the appellant was not entitled to avail credit prior to the Notification No. 02/14 (N.T) dt. 20.01.2014 in terms of Notification No. 01/10-CE dt. 6.02.2010 - HELD THAT:- There is no provision in law for the appellant to file invoices before the department in time. In that circumstances, as the assessee was allowed credit by the adjudicating authority although the revenue has filed appeal against those orders before the Commissioner (Appeals). In that circumstances, when the adjudicating authorities are having a divergent views, the extended period of limitation is not invokable in the facts and circumstances of this case.

  Admittedly, in the case in hand, the show cause notice has been issued by invoking extended period of limitation, therefore, the denial of credit is barred by limitation - Appeal allowed - decided in favor of appellant.

  ---

• 2018 (9) TMI 1995
  

  Deduction u/s 10A Computation - Whether ITAT was correct in law in holding that if a particular item is not part of 'Export Turnover' when it cannot constitute a part of 'Total Turnover' as well? - HELD THAT:- SLP disposed of in the light of our order dated 24th April, 2018 passed in the case of Commissioner of Income Tax Central III v. HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT] and connected matters.

  ---

• 2018 (9) TMI 1994
  

  Exemption u/s 11 - Charitable activity u/s 2(15) - promoting technology or technology related activities - ITAT held that the assessee’s activities are charitable and that it was not engaging in any business or commercial activity - HELD THAT:- Appeal preferred by the Revenue against the same impugned order [2018 (5) TMI 1814 - DELHI HIGH COURT] for the assessment year 2010-11, has been dismissed by this Court following the judgment of this Court in M/s GS1 India v. Director General of Income Tax (Exemption)and Anr. [2013 (10) TMI 19 - DELHI HIGH COURT] wherein held that the similar activities of promoting technology or technology related activities could not be considered commercial or business activities, per se. No substantial question of law.

  ---

• 2018 (9) TMI 1993
  

  Maintainability of appeal - low tax effect - monetary limit in reference to latest Circular No.3/2018 dated 11.07.2018 issued by the CBDT - HELD THAT:- The CBDT has directed the Revenue not to file appeal before the Tribunal where the tax effect does not exceed ₹ 20 lakhs. In the above mentioned appeal of the assessee the tax effect is less than ₹ 20 lakhs. Therefore, we hereby dismiss the appeal filed by the Revenue as not maintainable.

  ---

• 2018 (9) TMI 1992
  

  Unexplained cash credit being peak negative cash balance found during the course of survey - HELD THAT:- Since the books of accounts were accepted by the tax authorities with no defects or deficiency therein, the order of CIT(A) is wrong and should not be accepted. We fail to understand that as to how addition on account of negative cash balance could be sustained by the CIT(A) when the books of accounts were accepted in which no defect or deficiency was pointed out during the assessment proceedings.

  We are of the view that the assessee has a very strong case in its favour and the order of Ld CIT(A) can not be sustained. We, therefore, set aside the order of CIT(A) and direct the AO to delete the addition as there is no unexplained cash in the books of accounts of the assessee. Appeal of the assessee is allowed.

  ---

• 2018 (9) TMI 1991
  

  Disallowance u/s 14A r.w.r. 8D - CIT(Appeals) by placing reliance on the order of this Tribunal in M/s Royala Corporation [2016 (1) TMI 239 - ITAT CHENNAI] directed the Assessing Officer to restrict the disallowance to the extent of exempted / dividend income earned by the assessee - HELD THAT:- As rightly submitted by assessee, the Madras High Court in Redington (India) Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] and Chettinad Logistics Pvt. Ltd. [2017 (4) TMI 298 - MADRAS HIGH COURT] categorically found that there cannot be any disallowance when the assessee has not earned any exempted income.

  Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly placed his reliance on the order of this Tribunal in Royala Corporation Ltd.[2016 (1) TMI 239 - ITAT CHENNAI].

  The only contention of the Ld. D.R. before this Tribunal is that an appeal is pending before the High Court. It is nobody’s case that the High Court has stayed operation of the order of this Tribunal in M/s Royala Corporation Ltd. (supra). Mere pending of appeal before the High Court cannot be a reason to take a different view by this Tribunal. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

  There cannot be any disallowance under Section 14A of the Act when there was no exempted income or dividend income earned by the assessee, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

  ---

• 2018 (9) TMI 1990
  

  Disallowance of Provision of warranty and After Sales Cost - allowable deduction u/s 37 - HELD THAT:- Claim of the assessee in principle is allowed by the Hon’ble Jurisdictional High Court in assessee’s own case in many assessment years i.e. 1998-99 to 2009-10. It is also evident from the above table that the Assessing Officer himself allowed claimed of the assessee in assessment year 2002-03 and 2009-10.

  In same assessment year, the Department accepted the said decision of the Tribunal and never filed appeal before the Hon'ble Bombay High Court. As such, decision of CIT (A) is, in principle, as per judgment laid down by the Hon'ble Apex Court in the case of Rotork Controls India Ltd. [2009 (5) TMI 16 - SUPREME COURT]. It is a settled legal principle that in any case where estimation is done based on scientific method and calculated properly, the provision made for warranty in respect of goods should be allowed u/s. 37 (1) - Decided in favour of assessee.

  ---

• 2018 (9) TMI 1989
  

  Estimated commission of accommodation book entries - Addition @ 10% by AO - CIT(A) accepted contentions of the assessee but reduce estimation of income to @ 2% of total amount of accommodation entries - HELD THAT:- We observe that the estimate provided by the appellant that from such alleged transactions of accommodation entries the assessee received @ .03% to 1% benefit was on very lower side looking into the activities and the risk undertaken by the assessee and thus, the same was rightly dismissed by the ld. first appellate authority.

  Estimation of commission of 2% of total accommodation entries are concerned, the ld. CIT(A) noted that the payer M/s. Rosy Royal Minerals derived benefit of 6.7% of total amount of alleged entries and taking a reasonable estimate of commission thereon, CIT(A) reduced and restricted the addition to 2% of total amount which is quite reasonable and justified. In view of above, we are in agreement with the observation and conclusion drawn by the first appellate authority and hence, we are unable to see any valid reason to interfere with the same.

  Estimating of income of the assessee @ 2% as against 10% made by A.O. on the aggregate unexplained cash deposits in the bank accounts - AY 2011-12 - HELD THAT:- We are of the view that the estimate adopted by the ld. CIT(A) @ 2% of total deposits is excessive and the contention of the ld. AR that income from these deposits is 0.15% is also on very lower side which is also not acceptable. Therefore, taking a balancing and reasonable approach, we direct the AO to estimate the commission income from these deposits which are mainly pertaining to the business of discounting of cheques/DD @ 0.50% of total deposits covering up all the possible leakages of Revenue in this regard. Conclusion drawn by the ld. CIT(A) is modified.

  ---

• 2018 (9) TMI 1988
  

  Demand of differential amount of service tax alongwith interest and penalty - allegation of discrepancies in figures as per financial records with that of figures mentioned in ST-3 Returns for the period from April, 2007 to March, 2011 - HELD THAT:- It is noticed from the reconciliation statement submitted that some amount of money received towards booking, was subsequently refunded to the parties on account of cancellation of booking. In many cases, service tax has not been collected separately and hence, the appellants have prayed for allowing cum tax benefit as envisaged in Section 67 (2).

  In the case of Advantage Media Consultant [2008 (3) TMI 59 - CESTAT KOLKATA], the Tribunal has held that the total amount collected for the provision of services, should be treated as inclusive of service tax to be paid. When no tax is included separately, the gross amount has to be adopted to qualify the tax liability treating it as value of the taxable service plus service tax payable.

  Penalty - HELD THAT:- There are no ingredient of suppression, mis-statement etc. with intent to evade payment of service tax. The facts in respect of activities undertaken by the appellants are same as mentioned in the show-cause notice, which was issued after a gap of nearly four years and the Department has not rebutted the calculation submitted by the appellant. Accordingly, penalty imposed under Section 78 is set aside.

  The discrepancies as mentioned in the reconciliation statement filed by the appellant as reproduced above being factually apparent from the record, needs to be rectified and demand should be taken as cum-tax and should be re-quantified accordingly. For this limited purpose, the matter is remanded to the adjudicating authority - Appeal allowed by way of remand.

  ---

• 2018 (9) TMI 1987
  

  CENVAT Credit - inputs used in the manufacture of supporting structures of capital goods - Angles, Channels, Chequired Coils, CTD Bar, GC Sheet, HR Sheet/Plate, Joist, MS Beam, MS Flat, MS Rod, MS Rounds, Plate & TMT Bar etc. - HELD THAT:- It is observed from the SCN that the steel materials have been used to make gigantic steel structures to participate in the manufacturing process of Sponge Iron and M.S. Billet carried out by them and without them the manufacture process could not be completed - The issue to be decided in this appeal is regarding availability of Cenvat credit on various structural items such as Angles, Channels, Chequired Coils, CTD Bar, GC Sheet, HR Sheet/Plate, Joist, MS Beam, MS Flat, MS Rod, MS Rounds, Plate & TMT Bar etc. which have been used in making support structures of the Capital Goods.

  The Learned Commissioner (Appeals) has decided the appeal in favour of the Department by relying upon the decision of the Larger Bench of the Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)]. The aforesaid decision of the Larger Bench was considered by the Hon’ble Court of Gujrat in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS [2015 (5) TMI 663 - GUJARAT HIGH COURT] wherein it was observed that the amendment made on 7.7.2009 cannot be held to be retrospective and as such applicable only prospectively.

  The controversy can be laid to rest by making a reference to the decision of the Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT], wherein the Hon’ble Supreme Court has considered an identical issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgment, the Apex Court has referred to the “user test” evolved by the Apex Court in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [2001 (7) TMI 118 - SUPREME COURT], which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the “user test” to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods - the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of ‘Capital Goods’ includes, components, spares and accessories of such capital goods. Accordingly, applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat credit.

  Appeal allowed - decided in favor of appellant.

  ---

• 2018 (9) TMI 1986
  

  Discharge from all charges - Section 245 of Cr.P.C - HELD THAT:- This Court finds that there are prima facie allegations made out against the petitioner/accused to proceed the cases further. At the time of deciding petition, seeking discharge, the Court has to see whether there is any prima facie allegations to proceed the case and the defence taken by the accused need not be looked into at the time of framing of charges. Under these circumstances, the contention of the petitioner that the authority, who accorded sanction is incompetent, is not acceptable. Prosecution has to prove its case at the time of trial, whether the authority, who accorded sanction is competent or not and also it is a matter for trial and the issue raised by the petitioner/accused regarding competency, can be decided at the time of trial. Now, charges were framed and trial has been commenced in all the above cases, hence at this stage, these revisions against the orders of dismissal of discharge petitions, cannot be entertained.

  It is settled proposition of law that while considering petition for discharge of the accused, allegations and materials in the documents filed under Section 173 Cr.P.C. must be considered and not the defence taken by the accused.

  Criminal revisions are dismissed.

  ---

• 2018 (9) TMI 1985
  

  Addition u/s 14A - no exempt income reported - HELD THAT:- We find that ld. CIT(A) by following the decision of the coordinate bench of the tribunal in the case of Radha Krishna Automobiles [2017 (11) TMI 1689 - ITAT VISAKHAPATNAM], wherein the decisions of the Hon'ble Madras High Court in the case of Redington (India) Ltd [2017 (1) TMI 318 - MADRAS HIGH COURT] and case of Pr.CIT Vs. Sintex Industries Ltd. [2017 (6) TMI 601 - GUJARAT HIGH COURT] have been followed, and held that there is dividend income and section 14A r.w.r. 18D of the IT Rules, 1962 has no application and directed the Assessing Officer to delete the addition. Ld. Departmental Representative has not brought any decision of the jurisdictional or any other High Court which is contrary to the decision of the Hon'ble Madras High Court as well as Gujarat High Court (supra). Therefore, we find no infirmity in the order passed by the ld.CIT(A). - Decided against revenue.

  ---

• 2018 (9) TMI 1984
  

  Quantum of fine and punishment - Compounding of offence - Section 165(6) of the Companies Act, 2013 - HELD THAT:- The impugned order dated 28th March, 2018 has been passed by the Tribunal in contravention of Sub-section (6) of Section 165 of Companies Act, 2013, we set aside the impugned order. However, taking into consideration the facts and circumstances of the case, we impose minimum fine at the rate of five thousand rupees for every day after the first during which the contravention continued. The default having continued for 849 days w.e.f. 01st April, 2015 to 18th July, 2017, we quantify the penalty to ₹ 42,45,000/- to be paid by the Respondent/ Petitioner within a period of 45 days.

  Appeal allowed.

  ---

• 2018 (9) TMI 1983
  

  CENVAT Credit - establishments of the Petition No.1 or not - consulting engineering services rendered outside India by the Petition No.1 to any other subsidiary of Linde AG or holding company - Export of Services - proportionate reversal of Credit under Rule 6A of the STR - it is submitted that action of the respondent in issuing show cause notice is without jurisdiction and contrary to the provisions of Rule 6A of Sales Tax Rules read with Section 65B (44) of the Act - HELD THAT:- Issue NOTICE returnable on 27^th September 2018.

  Meanwhile, there shall be ad-interim relief in terms of paragraph 9 (b) of the petition.

  ---

• 2018 (9) TMI 1982
  

  Bogus purchases - AO restricted the addition to 12.5% Kanak Steel India being the profit element embedded in nongenuine purchase also confirmed by CIT-A - only submission of assessee that he has paid VAT on the alleged bogus purchases, therefore, even if the profit element on the alleged bogus purchases is estimated at 12.5% but the VAT amount paid by the assessee should be reduced from such profit - HELD THAT:- Assessee should get the benefit of VAT paid on the purchases held to be nongenuine by the Assessing Officer. Accordingly, direct the Assessing Officer to verify the payment of VAT by the assessee and reduce it from the addition made of ₹ 1,15,990 and sustain addition to the extent of the balance amount. This ground is partly allowed.

  Levy of interest u/s 234C - HELD THAT:- Levy of interest is mandatory and consequential. Suffice to say, interest under section 234C of the Act has to be charged on the basis of income returned by the assessee.

  ---

• 2018 (9) TMI 1981
  

  Bogus purchases - addition was restricted to 12.5% of the purchases by CIT-A - contention of the learned Authorised Representative that the assessee has shown a gross profit rate of 3% on the purchases made and has also paid VAT @ 4% on such purchases. Therefore, even if the profit rate of 12.5% is adopted, the gross profit already shown by the assessee as well as VAT paid should be reduced from such profit rate adopted by the Departmental Authorities and the balance amount may be added - HELD THAT:- Considering the fact that the assessee has shown gross profit rate of 3% and has also paid VAT on such purchases @ 4%, direct the Assessing Officer to restrict the addition to 5.5% of the nongenuine purchases of ₹ 1,24,73,405 and delete the balance addition. This ground is partly allowed.

  ---

• 2018 (9) TMI 1980
  

  Principles of natural justice - request for cross-examination of witnesses denied - denial on the ground that respondent on cross-examination of witnesses present during the course of investigation is not warranted - HELD THAT:- The decision in the case of M/S MULCHAND M. ZAVERI & 1 VERSUS UNION OF INDIA & 1 [2016 (4) TMI 1074 - GUJARAT HIGH COURT], COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD - II VERSUS GUJARAT CYPROMET LTD. [2013 (7) TMI 245 - GUJARAT HIGH COURT] clearly upheld right of the affected party to cross-examine witnesses irrespective of the fact that he had an opportunity or an access to the material on record.

  Thus, if there are any witnesses of whose statement the competent authority relies on or propose to rely, such witnesses would be permitted to be cross-examined.

  Petition allowed.

  ---

• 2018 (9) TMI 1979
  

  Oppression and Mismanagement - Illegal allotment of shares - siphoning of funds - only Other director of SBF, Mr. Lalit Aggarwal. who has been impleaded as Respondent NO. 2 and the Statutory auditor Of the SBF, Mr. Mahesh Gupta, impleaded as Respondent No. 3 - PG alleges that the allotments are illegal and fraudulent as they have been made without PG's consent i.e. without approval Of the Board of Directors of SBF and by misuse of PG's digital signature by LA and R3 in filing the Form 2 on MCA pottal for allotment of the new shares.

  HELD THAT:- There exists a ground for winding up SBF on the grounds that it is just and equitable to do so. The only question confronting the Tribunal is whether by such an action the shareholder of SBF wili be unfairly prejudiced Or the public interest will be prejudiced. This Tribunal is of the considered view that neither will be prejudiced, as it is seen that the SBF has no operations Or business over the past several years because Of the inter-se disputes between the main protagonists, namely the two directors of SBF, being its only two directors and the assets Of SBF, it is evident, have also been stripped off. Thus, SBF has become a complete farce. It is also seen that public interest will Only be best served by SBF being wound up as even otherwise due to non-filing of annual retums and balance sheets, SBF in any case is liable to be struck Off, as the pending proceedings before this Tribunal cannot be factor for not filing the annual retums and balance sheets and thereby the Statutory compliances, all of which goes to the root Of corporate governance, Thus, in any which way looked at, SBF is a fit candidate to be wound up taking into consideration the noted factors.

  This Tribunal is Of the considered view that in relation to the affairs Of SBF there has been a absolute lack of probity in its dealings by both the petitioners and hence SBF is required to be wound up taking into consideration the facts and circumstances of the two company petitions filed by the rival panies to the lis and also having come to the conclusion that both the parties are not entitled to any reliefs as sought for in the respective petitions - this Tribunal has been empowered to wind up companies by virtue of Section 271 and 272 Of the Act having been notified as amended by Insolvency and Bankruptcy Code, 2016.

  Petition disposed off.

  ---

• 2018 (9) TMI 1978
  

  TP Adjustment - comparable selection - Functional similarity - HELD THAT:- Assessee-company is engaged in the business of export of software development and IT enabled services.

  Acropetal Technologies Limited - segmental information containing the break-up of its export sales and employee costs, was not available and it was not possible to ascertain if it passed the export earnings and/or employee costs filters; and (ii) a substantial portion of its software development activities have been outsourced on sub contract and it could, therefore, not be retained as a comparable - As rightly held by the DRP to be not comparable. We are of the view that once a company becomes not comparable for the reason that segmental information to apply filters, we need not consider any other aspect of comparability.

  L&T InfoTech Ltd - This company goes out of comparability on the ground that the profit margins adopted by the TPO was from 3 divisions of the Assessee - this company was held to be functionally not comparable as it is a market leader and thus enjoys significant benefits on account of ownership of marketing intangibles and intellectual property rights. Also, in addition to the above, the company owns proprietary software products which are developed in-house. Accordingly, as the company is a product company having significant intangibles and is thus not comparable to captive software service providers such as the Assessee.

  E-Infochips Ltd. company - It is functionally different from the profile of the assessee-company as it is engaged in development of maintenance of computer software and software development consulting and also manufacturing EVM and VDB electronic board. As per the website of the company, it provides silicon engineering evolving ASIC and FVGA design, verification and validation, physical design and DFD. Further, the company is engaged in manufacturing activities as evident from income statement. It has items pertaining to consumption of materials, changes in inventory and manufacturing service cost. It also fails service revenue filter as its software development filter is 73.78% which is less than 75% to the total revenue thereby failing the service revenue filter applied by the TPO.

  RS Software (India) Ltd. - Since, the entire operations of taxpayers are taking place offshore i.e in India, it is but natural that it should be compared with companies with major operations offshore, due to the reason that economics and profitability of onsite operations are different from that of offshore business model. We find that though the assessee as well as TPO has selected this company as comparable, the DRP on its own excluded this company by applying onsite revenue filter. Since, assessee as well as the revenue wants to include this company as comparable, we direct the A.O to include RS Software (India) Ltd as comparable company.

  Comparable for ITeS Segment - exclude M/s iGate Global Solutions Ltd, from the list of comparables on the ground that segmental information is not available - We find that though the company is deriving revenue from two different segments, it has failed to report segmental information in its annual reports. Therefore, we are of the considered view that the DRP was right in rejecting iGate Global Solutions Ltd., as comparable. We do not find any error in the findings of the DRP. Hence we are inclined to upheld findings of the DRP and reject the ground taken by the Revenue.

  Deduction u/s 10A - exclusion of telecommunication expenses from export turnover as well as total turnover for the purpose of determination of income eligible for deduction - HELD THAT:- we find that the issue of exclusion of telecommunication expenses from export turnover needs to be excluded from total turnover or not has been decided in the case of TATA Elexi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] and held that expenses excluded from export turnover have to be excluded from total turnover also, otherwise any other interpretation makes the formula unworkable and obsured and hence such deduction shall be allowed from the total turnover in same proportion as well. - DRP is right in directing the A.O to exclude expenses deducted from export turnover from total turnover. We do not find any error in the findings of the DRP, hence we are inclined to upheld the DRP findings and reject the ground raised by the Revenue.

  Disallowance of expenses incurred in relation to exempt income u/s 14A - HELD THAT:- We find that the ITAT has considered the issue of disallowance of expenses incurred in relation to exempt income in the light of the fact that the assessee has not earned any dividend income for the year under consideration and by following the decision of Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] held that disallowances contemplated u/s 14A has no application, if no exempt income is received or receivable in the relevant previous year. Thus we direct the A.O to delete the additions made towards disallowance of expenses incurred in relation to exempt income u/s 14A.

  ---

• 2018 (9) TMI 1977
  

  TP Adjustment - AO made a reference to TPO u/s 92CA to determine arms length price as the assessee had entered into specified domestic transaction and on the ground it was covered u/s 92BA - specific domestic transaction in the nature of remuneration paid to the directors by the Appellant - HELD THAT:- As decided in assessee's own case [2017 (12) TMI 1719 - ITAT BANGALORE] undisputedly, by the Finance Act, 2017, clause (i) of section 92BA has been omitted w.e.f. 01.04.2017. Once this clause is omitted by subsequent amendment, it would be deemed that clause (i) was never been on the statute. While omitting the clause (i) of section 92BA, nothing was specified whether the proceeding initiated or action taken on this continue. Therefore, the proceeding initiated or action taken under that clause would not survive at all. In this legal position, the cognizance taken by the AO under section 92B(i) and reference made to TPO under section 92CA is invalid and bad in law. Therefore, the consequential order passed by the TPO and DRP is also not sustainable in the eyes of law.

  Where this clause (i) is omitted from the statute since its inception, the AO ought have required to frame the assessment in normal course after making necessary enquiries of particular claim of expenditure in accordance with law. But this exercise could not have been done on account of provisions of section 92BA Clause (i) of the Act. Now when this clause (i) has been omitted from the statute by virtue of the aforesaid amendments, the AO is required to adjudicate the issue of claim of expenditures in accordance with law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore the matter to the AO with the direction to readjudicate the issue of claim of expenditure incurred in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A.

  Disallowance u/s 14A - HELD THAT:- The authorities have made disallowance having noted that the assessee did not have any exempted income. On this issue, it has been repeatedly held by the Tribunal, Hon’ble Apex Court and the High Court that wherever there is no exempted income, provisions of section 14A cannot be invoked. In the light of these facts, the finding of the lower authorities appears to be wrong as they have made the disallowance even after having noted that there is no exempted income. But in fact, the assessee has exempted income. Therefore, the disallowance can be made in accordance with the provisions of section 14A of the Act. Since this aspect was never examined by the AO, we set aside the order of the CIT(A) and restore the matter to the AO with a direction to readjudicate the issue afresh after affording opportunity of being heard to the assessee, keeping in view that earlier issue was also restored to the AO for readjudication.

  Appeal of the assessee stands allowed for statistical purposes.

  ---

1 ....5678910111213........ 108