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Case Laws
Showing 181 to 200 of 2006 Records
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2018 (4) TMI 1830
Interpretation of Section 65B(4) of the Evidence Act - admissibility of the electronic evidence - HELD THAT:- We are in agreement with the Report of the Committee of Experts that videography of crime scene during investigation is of immense value in improving administration of criminal justice.
Notwithstanding the fact that as of now investigating agencies in India are not fully equipped and prepared for the use of videography, the time is ripe that steps are taken to introduce videography in investigation, particularly for crime scene as desirable and acceptable best practice as suggested by the Committee of the MHA to strengthen the Rule of Law.
The Plan of Action prepared by the Committee, a Central Oversight Body (COB) be set up by the MHA forthwith, to be implemented. The COB may issue directions from time to time. Suggestions of the Committee in its report may also be kept in mind. The COB will be responsible for further planning and implementation of use of videography. We direct the Central Government to give full support to the COB and place necessary funds at its disposal. We also direct that the COB may issue appropriate directions so as to ensure that use of videography becomes a reality in a phased manner and in first phase of implementation by 15th July, 2018 crime scene videography must be introduced at least at some places as per viability and priority determined by the COB.
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2018 (4) TMI 1829
Disallowance under "Peripheral Development Expenses" - Allowable business expenses or not? - CIT(Appeals) in partly sustaining the Expenditure incurred through Corporate Office of the assessee - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK ] AR referred to the nature of the expenditure incurred through the corporate office at Bhubaneswar and further substantiated that the assessee has evidence to prove the claim - claim of the assessee in respect of incurring of expenditure at peripheral areas as per the order of the Govt. is not disputed and the reasons recorded by the lower authorities in respect of sustenance of the addition to the cannot be overlooked - we remit this issue to the file of AO to verify the nature of expenditure incurred on the peripheral areas and decide the same on merits. This ground of appeal is allowed for statistical purposes.
Disallowance of Interest on disputed Govt. duty (Electricity Duty and water charges) - HELD THAT:- We find that the issue under consideration is covered by the order of the Tribunal in assessee’s own case for the assessment year 2006-07 & 2007-08 [2012 (12) TMI 632 - ITAT CUTTACK] issue decided in favour of the assessee - we allow the claim of the assessee on account of interest on disputed Govt. duty (Electricity duty and water charges) and this ground of assessee is allowed.
Disallowance u/s. 14A r.w.r. 8D - As per AO Disallowance made suomoto by the assessee is very less compared to the administrative and employee cost devoted to earn the exempt income - HELD THAT:- AO while computing the disallowance under clause (iii) of Rule 8D has computed 0.5% of the average investments held by the assessee company in whole, which includes the investments in equity shares and long-term debt funds as well, income from which has not been claimed as exempt by the assessee
AO could not make distinction between the equity shares and debt funds and calculated the disallowance, we are of the opinion this disputed issue has to be re-examined and apply the provisions of Section 14A r.w.rule 8D. Accordingly relying on H.T. MEDIA LIMITED [2017 (8) TMI 962 - DELHI HIGH COURT] we restore this disputed issue to the file of the AO to re-examine and verify and apply the above provisions. This issue is allowed for statistical purposes.
Additions Under Trial Operation expenses - as per AO the said expenditure incurred by the assessee till commercial production starts, could not be claimed as revenue expenditure and has to be capitalized - CIT(A) sustained the disallowance made by the AO holding that since trial run expenditure is pre-commercial production expenditure, the AO was correct in not allowing the same as revenue expenditure - HELD THAT:- AO as well as the Ld. CIT(A) have not controverted the fact that the Captive Power Plant of the assessee company has been duly commissioned in the year under consideration for commencing commercial production and we support our view with the decision of Pr. CIT Vs. Larsen & Toubro Ltd. [2017 (11) TMI 1607 - BOMBAY HIGH COURT] wherein held once plant commences operation and even if product is substantial and not marketable, the business can said to have been set up. Mere breakdown of machinery or technical snags that may have developed after the trial run which had interrupted the continuation of further production for a period of time cannot be held ground to deprive the assessee of the benefit of depreciation claimed.
We find the trial operation expenses incurred in the same year of sale. We respectfully follow the judicial decisions and direct the AO to treat the expenditure incurred by the assessee company on such trial operation as revenue expenditure and allow the claim and this ground of appeal is allowed.
Disallowance under "Prior period adjustments" - addition made as said expenses are not related to the year under consideration - CIT(A) sustained the disallowance holding that no evidence was filed in order to prove that the prior period expenses have crystallized during the year under consideration - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] remit this disputed issue to the file of AO to examine the claims and grant the set off of prior period income against the prior period expenses and passed the order on merits and the ground of appeal is allowed for statistical purposes.
Disallowance of amounts written off in respect of Claims, receivables, advances, shortages etc - as per AO no supporting documents and evidences in this regard were filed by the assessee - CIT(A) has sustained the disallowance holding that the assessee could not claim the written off of the advances when they were not a part of income of earlier years - HELD THAT:- It is not in dispute that the amount of said advances has been given during the course of business and for business purpose only, which has become irrecoverable. Ld. AR drew our attention to paper book and submitted that the assessee has filed all the details before both the authorities below. Since the said amount has been utilized for business purpose and has to be allowed either as a business expenditure u/s 37(1) of the Act, or as a business loss while computing the profits and gains u/s 28 of the Act, considering the submissions of ld. AR of the assessee, we are of the opinion that the issue requires further examination by the AO - thus allow this ground of appeal for statistical purposes.
Disallowance of Provision for Leave Encashment' u/s.43B(f) - AO alleging that the same is allowable only if the said expenditure has actually been paid by the assessee - CIT(A) has sustained the disallowance made by the AO holding that the decision in the case of Excide Industries Ltd. v. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] has been stayed by the Apex Court - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] we set aside the order of the CIT(A) and remit the matter to the file of the Assessing officer to re-adjudicate the issue in the light of the Hon‘ble Supreme Court decision. Hence, this ground is allowed for statistical purposes.
Disallowance u/s.43B Under 'Electricity Duty' & water Charges - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] disallowance u/s.43B has to be primarily when such electricity duty has been claimed as expenditure in the impugned assessment year. The assessee could not override the Hon‘ble High Court directions. The expenditure remained unpaid for both the years in spite of these directions, therefore, was rightly brought to tax by the ld AO u/s.43B, we uphold the confirmation thereof by the ld CIT(A). This ground for both years stands dismissed
Treatment of capital gain income as business income - CIT(A) has affirmed the action of the AO by stating that frequent transactions entered into in stocks / shares / mutual funds by the assessee as well as the substantial amount involved in these transactions, reflects that the income earned from these transactions should be taxed as business income of the assessee - HELD THAT:- Object of the assessee is manufacturing and assessee being a public sector company has enough funds and made investment in the mutual funds and on redemption the income is offered under the capital gain and the main object being the business and the maximum income is established through the direct business operations and not from the financial transaction. The investment has been made with the mutual funds/liquid funds/ closed ended funds and encashment on redemption/maturity. Further, the total profit earned by the assessee company by way of capital gains is only about 4% of the total income of the assessee company, which clearly shows that the assessee company is engaged in the business of mining, manufacturing, generation and production of aluminium and not dealing in mutual funds / liquid funds.
As relying on Ramniwas Ramjivan Kasat [2017 (6) TMI 351 - GUJARAT HIGH COURT]we direct the AO to treat the income as capital gains and not as business income and this ground of appeal of assessee is allowed.
Disallowance of loss on valuation of non-moving store and spares - AO has made the disallowance stating that the loss claimed on account of diminution in the value of non-moving stores and spares should be restricted to 25% of the original cost, instead of 95% as claimed by the assessee - HELD THAT:- As decided in own case [2005 (11) TMI 483 - ITAT CUTTACK] we set aside the order of the CIT(A) on this ground and direct the AO to allow the claim of loss on account of value of non-moving stores and spares.
TDS u/s 195 - Payment to non residents - HELD THAT:- Amounts have been paid towards purchase of raw material, etc. on principal to principal basis and the assessee has procured the goods from the non-resident seller at its own cost after making payments on CIF basis. The raw material is sold by the non-resident seller in foreign soil, hence, no income accrues to the non-resident seller in the Indian territory. The Revenue has not controverted this finding of CIT(A) by bring any material on record nor it is apparent that income in respect of transactions arises in favour of the non-resident sellers in the Indian territory or that the income of such nonresidents in respect of transactions is assessable under Indian Income tax Law. The CIT(A) while considering the disputed issue has relied on the decision of GE India Technology Cen (P) Ltd. [2010 (9) TMI 7 - SUPREME COURT]and observed that if the payment is made to a non-resident, which is not a taxable income in India, then no tax is required to be deducted u/s.195 of the Act and deleted the addition. In view of the above, we do not see any reason to interfere in the order of CIT(A), who has passed a reasoned order .
Addition made on account of provision for provisional salary claimed by the assessee u/s.37 - AO stated that in case of the assessee the liability has not been actually arisen and it is merely anticipated and disallowed the same - HELD THAT:- We found that the ld. DR could not controvert with any new findings of the CIT(A) except relying on the order of AO and on perusal of the CIT(A)’s order we found that the assessee has produced the bills and supporting documents. The CIT(A) having considered these facts and also claim made by the assessee has passed a reasoned decision treating as ascertained liabilities and directed the AO to delete the addition.
TDS u/s 194J - training expenses - Addition u/s 40(a)(ia) - CIT(A) while considering the disputed issue he has observed that there is ambiguity on applicability of provisions of the TDS. AND the entire training expenses cannot be for technical services and therefore cannot be construed that TDS should be done as per the Section 194J - HELD THAT:- AO had not segregated exactly which amount requires TDS. There is also ambiguity regarding under what provisions of the section the TDS are to be done. The entire training expenses cannot be for technical services and therefore cannot be construed that TDS should be done as per the Section 194J -the expenses claimed by the appellant should not be disallowed and provisions of section 40(a)(ia) should not be attracted. The AO is directed to delete the same correctly.
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2018 (4) TMI 1828
Effective date of settlement agreement - determination of what is the taxable "previous year" - HELD THAT:- We are unable to concur with Commissioner of Income-tax (DR) objection that the effective date of settlement agreement is not January 1, 1984.
As in the case of CIT v. Patiala Sales Corporation Pvt. Ltd. [1970 (1) TMI 9 - PUNJAB AND HARYANA HIGH COURT] has held that the option given by the statutory provisions of section 3(1)(b) is to the assessee and not to the Department and once such an option is exercised the Department has no alternative but to assess the income in accordance with the option so exercised.
AR has highlighted the facts of the case from the computation of income filed by the assessee. In the computation/s for the assessment years 1981-82 to 1984-85, the assessee has categorically mentioned its accounting year/previous year as ending with the calendar year.
It is only with effect from the assessment year 1985-86 that the assessee has shifted to financial year being its previous year. Undisputedly, for the twelve month period relevant to assessment year 1984-85 the assessee has drawn up its accounts as year ending December 31, 1983
Assessee has validly, exercised its option as envisaged in section 3(1)(b) of the Act. We, therefore, find considerable merit in the additional ground of appeal and the same is, therefore, allowed. AO is accordingly directed to assess the taxable total income of the assessee for the assessment year 1984-85 with taking the "previous year" as on January 1, 1983 to December 31, 1983 and considering the effective date of settlement agreement as January 1, 1984.
Assessing Officer is given the liberty to take necessary remedial steps as per law for assessment of compensation flowing to the assessee under the settlement agreement in the appropriate assessment year - entire issues raised before us by both the parties will also have to be necessarily re- examined afresh by the Assessing Officer. Accordingly, all the issues raised by both the parties are also restored to the file of the Assessing Officer to be decided afresh in terms of our observations after giving due opportunity to the assessee.
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2018 (4) TMI 1827
Premium received on tenancy transfer - correct head of income - Capital gain or income from other sources - exemption u/s 54 EC - HELD THAT:- As decided in own case [2017 (2) TMI 1467 - ITAT MUMBAI] CIT(A) has rightly directed the AO to assess this receipt of premium as capital gain taxable in the hands of the assessee. Even otherwise, this issue is covered in favour of assessee by the principle of consistency in view of the decision of Radha Soami Satsang [1991 (11) TMI 2 - SUPREME COURT] and Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT]. We find no infirmity in the order of CIT(A) and hence the same is confirmed. These four appeals of Revenues are dismissed.
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2018 (4) TMI 1826
TP Adjustment - adjustment to the price of International transaction of provision of engineering and design services - cost incurred toward AE and non-AE transaction - amount received by the assessee corresponding to the man-hours utilised by the AE - cost allocated towards utilized man-hours of AE transactions according to the matching principle of revenue & expenses - HELD THAT:- We cannot take different yardsticks for measuring cost incurred toward AE and non-AE transaction by same set of manpower. Taking committed man-hours in the case of AE, which also included unutilized man-hours, would distort the allocation key. Thus, the basis of allocation of the cost towards the AE transaction should be on man-hours utilized only and not on man-hours which have been committed by the AE for payment.
TPO should have only computed the cost allocated towards utilized man-hours of AE transactions according to the matching principle of revenue & expenses - total cost incurred by the assessee is for total man-hours utilized, both for the AE as well as non-AE transactions, and thus, while allocating the cost to the AE transactions, non-utilized manhours cannot be included.
Since the man-hours utilized for the AE are 5695 and man-hours utilized for non-AE are 2,77,730, the total man-hours utilized would be (5695 + 2,77,730 =) 2,83,425 and the ratio of man-hours utilized by the AE to the total man-hours utilized would be (5695/283425)X 100 = 2%.
Since the amount received by the assessee corresponding to the man-hours utilised by the AE has been worked out by the Ld. TPO which being less than the arm’s length price computed no adjustment to the price of International transaction of provision of engineering and design services is required. - Decided in favour of assessee.
Depreciation on intangibles - HELD THAT:- As decided in assessee's own case [2015 (11) TMI 1218 - DELHI HIGH COURT] the issue has been decided in favour of the assessee following the judgment of Smifs Securities Limited reported in [2012 (8) TMI 713 - SUPREME COURT]
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2018 (4) TMI 1825
Refund of Differential Amount - appellant’s claim is that the annual differential refund should be calculated taking all goods together irrespective of their value addition percentage - HELD THAT:- The Commissioner (Appeals) had given detailed reasons with the table of calculation in his order which was not refuted by the appellant - there are no reason to interfere with the order of the Commissioner (Appeals) - appeal dismissed - decided against appellant.
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2018 (4) TMI 1824
Extension of CIRP period - HELD THAT:- The fact that CIRP could not be taken up for nearly about 160 days because of various interim orders passed by this Authority and in view of the pendency of above said applications for adjudication, there is an urgent need to pass interim order to extend the CIRP period atleast till the next date of hearing. All the Counsels appearing for all the parties represented that it would be convenient for them to advance their arguments for final hearing of pending applications only on 15.05.2018 but not before that date. Hence, the CIRP period is extended till 15.05.2018.
This Interim Order is passed extending the CIRP period till 15.05.2018, subject to the orders of the Hon 'ble NCLAT in the Appeal pending before it.
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2018 (4) TMI 1823
Violation of principles of natural justice - appellant could not attend the personal hearing - power to remand the matter decided the appeal itself - HELD THAT:- The appellant have not submitted their reply to the SCN nor participated in the adjudication proceedings. In the interest of justice, we are of the view that a final opportunity may be allowed to the appellant to submits their reply to the SCN and appear for personal hearing before the Ld. Adjudicating Authority. Ld. Advocate undertakes that they will not seek unwarranted and unnecessary adjournments and will file reply to SCN within one month from the date of communication of the order.
Appeal allowed by way of remand.
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2018 (4) TMI 1822
Assessment u/s 153A - Treatment to sales tax subsidy - revenue or capital receipt - HELD THAT:- issue of sales tax subsidy is covered in favour of the assessee by order of ITAT in assessee’s own favour in earlier assessment years 2007 – 08 and 2008 – 09 [2016 (4) TMI 1320 - ITAT DELHI]. This issue also came up in assessment year 2009 – 10 and the same was decided in favour of the assessee - Also this addition has been made without there being any incriminating material found in respect of this addition during the course of search conducted on the premises of the assessee. Respectfully following the earlier orders of the Tribunal in the assessee’s own case as aforementioned we allow these grounds raised by the assessee.
Disallowance of professional charges paid for feasibility study - Tribunal had noted that no new asset had come into existence nor any benefit of enduring nature had resulted for the assessee company and, therefore, the expenditure incurred on feasibility study was to be allowed as revenue expenditure. As nothing new has been brought on record by the Department subsequent to the earlier order of the ITAT and nothing new or incriminating was found during the course of search, we hold that the expenditure incurred on feasibility study is to be allowed as revenue expenditure and accordingly we allow the grounds raised by the assessee in this regard.
Disallowance u/s 14A - Admittedly, the assessee had not earned any dividend income during the year under consideration and, therefore, no disallowance under section 14A could be made. It is seen that with respect to this disallowance also nothing incriminating was found during the course of search and, therefore, in absence of any evidence to the contrary being demonstrated by the Department, since the assessee has not earned any dividend income during the year under consideration, we find no reason to interfere with the findings of CIT (Appeals) in this regard and we deem it fit dismiss the grounds raised by the Department.
Ad hoc disallowance to the extent of 5% of the total foreign travelling expenses - as per AO disallowance should be restored to 10% of the total expenditure on foreign travelling - HELD THAT:- As no incriminating material has been brought on record in respect of this item of expenditure and this issue has already been settled in favour of the assessee by earlier orders of the ITAT [2016 (4) TMI 1320 - ITAT DELHI]. Consistent with the view taken in earlier orders of the ITAT, the ground raised by the assessee is allowed
Addition for scrap sales - addition for the first time in the order passed under section 153A - HELD THAT:- It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment in the case of Principal CIT versus Smt. Anita Rani[2017 (3) TMI 389 - DELHI HIGH COURT] - in view of the finding of fact by the Ld. CIT (Appeals) that incriminating material found in respect of the scrap sales amounted to ₹ 20,73,211/- - Decided against revenue.
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2018 (4) TMI 1821
Deduction u/s 80IA(4)(iii) - specific condition in the notification pertaining to the assessee regarding the number of units was not fulfilled - assessee contended that the Assessing Officer had ignored the Profit and Loss Account relating to software business filed vide letter dated 14.02.2014 - CIT-A allowed the claim - HELD THAT:- Where the learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A) and in view of evidences filed by the assessee in audit report in form No.10CCB, we hold that the assessee is entitled to claim the aforesaid deduction under section 80IA(4)(iii) - Decided against revenue.
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2018 (4) TMI 1820
Amnesty Scheme - whether the owner of a property, which is brought to sale under the provisions of Revenue Recovery Act and bid on behalf of the Government, thus treating it as bought-in-land, can seek reconveyance of the same once the liability, against which revenue recovery action had been initiated, has been paid off subsequently either in full or under the terms of an Amnesty Scheme?
HELD THAT:- The power of restitution of this Court is edificed on the acme principles of justice, equity and fair play and wherever it becomes necessary, this Court would not refrain from passing orders to ensure that litigants, who are illegally and unfairly divested of their properties, are restituted appropriately so that the allegation of unjust enrichment is not perpetrated.
In the case at hand, once the orders of assessment had been set aside by Exhibit P1 order of the learned Tribunal, there was no justification for the State to hold on to the property even though such sale was confirmed in their favour by the Revenue Divisional Officer through Exhibit P2 order. The conduct of the authorities in rejecting the request made by the appellant for return of his property, on the ground that the Act does not provide for such a course is completely unfair and improper. There was no justification for the State to hold on to the property as bought-in-land and since they are refusing to return it, it would be enjoined on us, while acting under writ jurisdiction, to ensure restitution in favour of the appellant so as to obtain to him complete justice and equity.
This is more so because, when we pointedly asked the learned Government Pleader whether the value of the land was taken into account while the appellant was offered an opportunity to pay off the tax amounts assessed subsequent to the sale through the Amnesty Scheme, the learned Government answered in the negative and confirmed that the value of the land was not taken into account and that the appellant had paid all the liability under the Amnesty Scheme without the value of the property being set off against it.
The first respondent is directed to issue orders immediately and take action to return the property covered by Exhibit P2 order of the Revenue Divisional Officer to the appellant, after cancelling the sale and the orders of confirmation - appeal allowed.
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2018 (4) TMI 1819
Clarification/direction to exclude the period of 55 days from CIRP period - Section 12(2) of the I & B Code 2016 - HELD THAT:- The period of 270 days which will expire on 19.04.2018 be extended by excluding 55 days to complete the CIRP.
The Bench having considered the entire facts and circumstances of the matter satisfied that the prayer of the applicant deserves to be allowed. Accordingly, the Bench clarifies that 38 days time consumed in the litigation in deciding the MA No. 873/2018 filed by Suraksha ARC be excluded (Since on 22.01.2018 the MA was not listed and the Bench heard the MA on 09/02/2018 and orally directed the RP not to conduct any COC meeting till the date of final order on 19/03/2018) from the 90 days period in the order dated 24/01/2018.
Application allowed.
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2018 (4) TMI 1818
Refrain from taking over the possession of the said land till the completion of corporate insolvency resolution process subject to the proviso u/s 14 (1) (d) of the Code - ex-parte ad-interim order directing the Respondent to continue the JDA - whether MHADA land falls within the ambit of clause 'd' of section 14(1) of the Code or not?
HELD THAT:- Even if it is assumed, the Corporate Debtor has been continuing with the possession of the property basing on the JDA, such possession cannot be called as possession recognised under law. It can't be either possession on lease, or possession on mortgage with possession, or adverse possession - this application has been filed by the Resolution Professional through Corporate Debtor to ascertain that he is entitled to the exclusive possession of the property despite no right has been accrued to this Corporate Debtor. When the documents disclose granting licence to this Corporate Debtor for joint development, it is evident on record that this right given to the Corporate Debtor is for joint development by the Corporate Debtor and tenants therein. If it is for joint development, then it is to be understood that it is a right given for joint development not for exclusive development by the Corporate Debtor. Therefore, either by law, or by factual matrix, the possession claimed by the corporate debtor is not recognised under law.
If section 18 is r/w section 25 of the Code, it is evident in section 18 (1) (f) that IRP is endowed with duty to "take control & custody of any assets over which Corporate Debtor has ownership right as recorded in the Balance Sheet of the Corporate Debtor or with information utility or the depository of securities or any other registry that records the ownership records, the ownership of assets of the Corporate Debtor which may or may not be in possession of the in the same section, an explanation has been given stating that assets shall not include the assets owned by third party in possession of the Corporate Debtor, held under Trust or under contractual arrangements including bailment. Assuming the agreement of licence is in force, then also the possession alleged to be lying with the Corporate Debtor cannot become an asset mentioned in section 18(1)(f) of the Code - It is a fact that this Corporate Debtor in spite of taking over from the banks and over ₹ 1,000crores collected from the free sale, this Corporate Debtor till date neither paid money to the bankers nor provided flats to either to the tenants or to MHADA as agreed in the agreement. This postponement has been continuing for the last nine years, no respite to the tenants, the rent has not been paid for the last several years, that due outstanding has itself been accrued to ₹ 35crores. This has been clearly recorded in the order passed by Hon'ble High Court on 20.03.2017 mentioning that flats have not been made ready to be given either to tenants or to MHADA. It is a public land and meant for public use, the corporate debtor is not expected to game the system without any development for the last nine years.
Even if termination of JDA by MHADA is not taken into consideration, we don't find any covenant in favour of the Corporate Debtor transferring possessory rights over the property of MHADA to the Corporate Debtor henceforth, this Bench hereby holds that possessory rights has not been transferred to the Corporate Debtor by virtue of the agreements entered in the year 2008 as well as in 2011.
It is also trite law that whenever any section is with overriding effect or prohibiting in nature, it has to be applied strictly to the ambit that has been mentioned under the section. It cannot be liberally used to apply to something that is not mentioned in the section. Therefore, when a party exercises its right of termination, it will not fall within the ambit of section 14(1)(a), here there is no scope to apply the object or purpose of Code or purpose of the section to extend the purview of this section - thus, the onerous duty is cast upon the Adjudicating Authority to examine into as to which issue is hit by section 238, which is not, if that discretion is not properly exercised, then it will jeopardise the rights of the parties. One must not get lost sight of the fact that the rights vested with the parties will not be extinguished by a statute much less by a court of law unless it has been legislated that a particular right vested with the parties has been held as extinguished by virtue of a legislation. In the backdrop of this, it is clear that there cannot be an omnibus application of section 238 to each and every issue related to corporate debtor.
Whether this Bench can ignore such situation saying that since it is Section 7 or 9 petition, it will pass an admission order thereafter to proceed with CIRP ignoring the fraud manipulated by the company through its management. There can be myriad situations such as above causing uncertainty to the rights of the parties, if section 238 is applied without taking the context involved in the case into consideration.
This Bench has not found any merit in the application moved by the Resolution Professional/Petitioner - Application dismissed.
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2018 (4) TMI 1817
TP Adjustment - Comparable selection - HELD THAT:- Referring to Software development services and IT enabled services of assessee, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (4) TMI 1816
TP Adjustment - international transaction - TPO worked out Transfer Pricing adjustment at nil by applying the difference in PLI to the value of international transaction alone - HELD THAT:- As relying on TARA JEWELS EXPORTS PVT. LTD [2015 (12) TMI 1130 - BOMBAY HIGH COURT] Adjustment to the transfer price should be restricted to the value of international transaction i.e. transactions entered into by the assessee with its AEs and not in relation to the transactions entered into by the assessee with third parties. Accordingly, we confirm the order of CIT(A) and this issue of Revenue's appeal is dismissed
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2018 (4) TMI 1815
Compounding of Offence - allegation against the offender/director are that he was the Director of more than twenty private limited companies till 31st March, 2015 - section 165(1) read with section 165(3) of the Companies Act, 2013 - HELD THAT:- The offender/director was holding the post as a Director in more than 20 companies at once till 31 03 2015. He tendered his resignation as a Director by one of such companies on 19.122015. However, its intimation was sent to the Registrar in Form DIR-12 on 10 02 2016 Thus, there was a delay of 272 days in tendering resignation, meaning thereby the offender/director was the Director in more than 20 private limited companies for a period of 272 days - As per section 165(6) of the Act, punishment for violation of provisions of section 165(1) read with section 165(3) of the Companies Act is "fine which shall not be less than ₹ 5,000/- but which may extend to ₹ 25,000/- for every day after the first during which the contravention continues.
It is seen from the bare perusal of the facts that on 31.03.2015, the offender director vacated office of the directorship of the company I.e. Fabius Private Ltd. However, his resignation was forwarded to Registrar of Companies on 10.02.2016. It appears to us that the delay was caused in onward transmission of the resignation to ROC, this is a proper and adequate ground for us to consider prayer of leniency in directing to pay compounding fees.
Petition disposed off.
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2018 (4) TMI 1814
Violation of principles of natural justice - Validity of assessment order - impugned orders are challenged on the short ground that show cause notices as well as personal hearing in both these cases were granted by one Officer, but the impugned orders were passed by a different Officer - HELD THAT:- If a case is heard by one Bench in a Court of Law and the judgment is delivered by another Bench without any further hearing, the same would tantamount to a judgment being delivered without hearing. The very purpose of personal hearing is to enable the Assessing Officer to either get enlightened or to enlighten the Assessee about the nature of the claim made by them. It is actually a two way communication. It has been repeatedly held that wherever a request is made for personal hearing, but the same was not granted, the orders passed without the grant of personal hearing are in violation of the principles of justice. Therefore, there is no use in contending that someone else has already heard the case and passed on the information to the present incumbent.
The impugned orders are set aside and the Officer now holding the post is directed to give an opportunity of personal hearing to the petitioners. After granting the opportunity of personal hearing, the Assessing Officer shall pass appropriate orders in accordance with law - Petition allowed.
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2018 (4) TMI 1813
Disallowance of business promotion expenses u/s 37 - CIT(A) was of the view that an amount incurred in connection with installation of stall and participation fees are allowable and the remaining expenses was not allowable in view of the Explanation-1 of Section 37(1) - HELD THAT:- CIT(A) was of the view that these fees are for participation fees and installation of stall which was not prohibited by the Medical Council Act.
So far as the remaining claim of the assessee is in connection with the expenses is concerned, the claim of the assessee is that the said expenses is not required to be allowed on the basis of the Circular No.5 of 2012 dated 01.08.2012 issued by the Central Board of Direct Taxes, New Delhi vide F.No.225/142/20120-ITA-11which was prospective in nature. It is not in dispute that the present assessment year is for the A.Y. 201112 Circular No. 5 and of 2012 dated 01.08.2012 issued by the Central Board of Direct Taxes, New Delhi vide F.No.225/142/20120-ITA-11 and was applicable prospectively for the A.Y. 2013-14 onwards.
Order passed by the PT. VISHWANATH SHARMA [2008 (2) TMI 423 - ALLAHABAD HIGH COURT] is only deals with the commission expenses whereas no such issue is in question in the present case.
Now, coming to the applicability of the circular dated 01.08.2012 is concerned, we are of the view that the same is not applicable retrospectively and in this regard we are also finding support in law settled in DCIT Vs. PHL Pharma (P.) [2017 (1) TMI 771 - ITAT MUMBAI]. Accordingly, we are of the view that the expenses are allowable, therefore, we decide this issue in favour of the assessee against the revenue.
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2018 (4) TMI 1812
Direction to call AGM - no interim relief was sought for by the petitioner in the petition, but later on after considering affidavit interim order passed by Tribunal, without deciding main case on merits - HELD THAT:- Parties have not disputed that the company petition has been filed with the prayer to direct the 1st Respondent to hold the Annual General Meeting for the Financial Year 2015-16 and the petition is pending for consideration before the Tribunal. The Tribunal has not deliberated on the issues on merit including the question as to which member is eligible or ineligible to take part in the AGM of The Madras Race Club (1st Respondent). Without deliberating on the issue aforesaid, based on the report submitted by an Hon’ble Retired Judge of the Madras High Court the impugned order has been passed without notice to the parties who will be affected - No objection was called by the Tribunal for by the Tribunal against the report of retired Hon’ble Judge about ineligibility of one or other person/member.
It is a settled law that the Court or the Tribunal cannot pass an interim order, which amounts to grant of final relief without deciding the main case on merit. In this case as the interim order dated 13th December, 2017 passed by Tribunal amounts to grant of final relief, the order is set aside - In the effect all consequential order(s) passed by Tribunal are declared illegal.
Appeal allowed by way of remand.
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2018 (4) TMI 1811
TP Adjustment in relation to manning fees - as per the assessee, if the reimbursement of expenses is considered while determining the arm’s length price of the international transaction, then the rate charged by the assessee which is in excess of the arm’s length rate adopted by the TPO - As canvassed even if one has to go by the manner in which benchmarking has been carried out by the TPO, even then the transactions of the assessee are at an arm‟s length price taking into consideration the amount of expenses reimbursed by the associated enterprise over and above the fixed rate of payment - HELD THAT: Finding of the Assessing Officer clearly supports the assertion of the assessee to the effect that the said expenses have been incurred by it in the course of providing the manning service to the associate enterprise, and the same have been recovered from the associate enterprise as reimbursements. We are only trying to highlight the fact that the said expenses are in relation to the “tested transaction‟ and therefore there is no justification in not considering them while computing the arm‟s length price.
Plea of the Revenue before us, based on the observation of the CIT(A) that the expenses have not been shown in the Profit & Loss Account, and therefore, it cannot be taken into consideration, is to say the least, avoiding the obvious. Ostensibly, if such expenses were to be debited to the Profit & Loss Account, it would require simultaneous equivalent credit to the Profit & Loss Account on account of reimbursements. Ostensibly, if one is to determine the rate charged by the assessee from its associate enterprise per crew per month, it would entail taking into consideration the recoveries by way of reimbursements also; and, as the Tabulation reproduced by us earlier shows that once such recoveries are also factored into the rate charged from the associated enterprise, the rate comes to US$ 150.28 per crew per month and upon comparison with the rate of US$ 150 adopted by the TPO, the amount recovered by the assessee from the associate enterprise compares favourably, and, thus it would obviate the need for any further adjustment to the stated values in order to arrive at the arm‟s length price.
We delete the addition made on account of transfer pricing adjustment of manning services as made by the Assessing Officer and sustained by the learned Commissioner (Appeals). The grounds raised are allowed to the extent indicated above.
Disallowance of unabsorbed depreciation and loss - As submitted that the related issue arising in assessment year 2004–05 is yet to be decided as the appeal for the said assessment year is still pending - HELD THAT:- We are inclined to restore this issue to the Assessing Officer for granting consequential relief depending upon the ultimate outcome of assessee’s appeal on the issue in assessment year 2004–05. This ground is allowed for statistical purposes.
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