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Showing 181 to 200 of 1621 Records
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2016 (5) TMI 1446
TPA - comparables selection - functional dissimilarity - Held that:-When a sufficient number of comparable companies are available for determination of arm’s length price (ALP), then the tolerance limit of RPT at 15% is proper in the case of assessee. Accordingly, we direct the AO/TPO to exclude the following three companies from the list of comparables having more than 15% RPT - Aztec Software Ltd., Geometric Software Ltd. (Seg.) AND Megasoft Ltd.
Assessee is purely a software development service provider to its parent company thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (5) TMI 1445
Allowing deduction to the assessee u/s 80P(2)(a)(i) - Held that:- The appellant's case is not covered by section 80P(4) as it is not a 'co-operative bank' and therefore, it is entitled to the exemption u/s 80P(2)(a)(i) of the IT. Act.
Commissioner of Income Tax (Appeals) has allowed the claim of deduction under sec. 80P(2)(a)(i) of the Act after following the decision at Panaji in the case of M/s. The Quepem Urban Cooperative Credit Society Ltd. Vs. ACIT [2015 (6) TMI 573 - BOMBAY HIGH COURT]. No contrary decision could be cited by the Departmental Representative. We, therefore, do not find any good and justifiable reason to interfere with the orders of the Commissioner of Income Tax (Appeals), which are hereby confirmed and this ground of appeal of the Revenue is dismissed.
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2016 (5) TMI 1444
CENVAT Credit - Rule 6(3) of the CCR - whether Respondent is required to discharge an amount equivalent to 5% / 8% of the value of Bagasee, Press mud & Bio-compost sold by the Respondent? - Held that:- Provisions of Rule 6(3) of the CCR are applicable only to a situation where exempted as well as dutiable products are manufactured by an assessee out of common inputs and no separate records are maintained.
Apex Court’s decision in the case of Union of India vs. DSCL Sugar Ltd. [2015 (10) TMI 566 - SUPREME COURT] held that provisions of Rule 6 of CCR shall have no application as Bagasee is not a product of manufacture - The same is true to the products Press mud and Bio-compost.
Respondent is not liable to pay 5% / 8% of the sale proceeds of these products - appeal dismissed - decided against Revenue.
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2016 (5) TMI 1443
Deduction u/s.80 IB - CIT (A) directed the AO to allow the netting of royalty to the profit and loss account while calculating the deduction under section 80 IB in respect of Jammu unit - Held that:- Present facts of assessee’s case stands squarely covered by the ratio laid down by Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd (2012 (9) TMI 620 - BOMBAY HIGH COURT). The assessee has paid certain royalty towards the technical know-how obtained by itand it had received certain license fee in respect of the same technical know-how as it was passed out to an outside party. The assessee could not exploit the technical knowhow for manufacture of goods at Jammu unit and therefore the assessee had shown the sums under corporate division. Respectfully following the decision above we hold that the sums of rupees for ₹ 4.25 crores and ₹ 1.96 crores has to be shown under corporate division and the excess along with other corporate expenses has been rightly been allocated to the 3 manufacturing units by the assessee.
Deflation in the inter-unit transfer of goods - Difference in the price - Held that:- Difference in the price is due to quality of shashet manufactured as per the requirement of the client. A.O. has only taken the highest value of shashet sold to the outside parties especially M/s. Kothari Products Ltd. and has compared with the lowest value of shashet charged to inter unit transfers. M/s. Kothari Product Ltd. Being a leading entrepreneur in Pan Masalas, would definitely opt for a high quality of shashet as compared to other parties. Such a comparison cannot be made as the requirements in respect of quality and quantity of each party would be different. Further, it has been observed that there has no other material / document / evidences brought on record by the A.O. to prove that the assessee has deflated the expenses of inter unit transfers. Thus no deflation in the inter-unit transfer of goods proved - decided against revenue.
Whether the excise duty refund in respect of Jammu unit has been “derived for”, for the purposes of deduction under section 80 IB? - Held that:- The paramount consideration of the central Government in providing the incentives to the new industrial units and substantial expansion of the existing units, was the generation of employment through acceleration of industrial development, to deal with the social problem of unemployment in the State, additional creating opportunities for self employment, hence a purpose in public interest - test of proximity, i.e., direct nexus with the industrial activity is not necessary while claiming deduction under section 80-IB of the Act. – Deduction allowed u/s 80IB – See CIT vs. Dharam Pal Pream Prakash Ltd [2008 (11) TMI 231 - DELHI HIGH COURT] also confirmed by SC [2010 (2) TMI 1202 - SUPREME COURT]- decided against revenue.
Allowability of ₹ 9 crores on account of license fee paid - Held that:- The assessee has not been able to justify the sudden rise in the license fee in the middle of the year. There does not seems to be any valid reason for such an increase of the license fees. It is also evident from the order passed by the Ld. AO that there is no material on the basis of which he has made an addition of ₹ 9 crores towards the license fees. It is therefore just and proper to consider the license fee for the period from 01.03.2005 to 31.01.2006 at ₹ 50 Lacs per month and ₹ 2 crores for the remaining months from 01.02.2006 to 31.03.2006. To meet the ends of Justice we therefore confirm the addition to an extent of ₹ 6 crore. - Decided partly in favour of revenue
Addition u/s 68 - unverifiable and unconfirmed advances from customers - Held that:- The trade customers as appearing in the list are the regular customers making purchases from the assessee from past many years it is evident from the Ledger account for the current as well a subsequent years shows that the assessee has been supplying goods to these parties in the normal course of the business and therefore the realisation of proceeds thereof is an ongoing process during the course of the business activity. The only finding of the AO that the assessee has not been able to produce confirmations from few of the parties cannot be the basis to arrive at a conclusion that these are unverifiable and unconfirmed. - decided against revenue
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2016 (5) TMI 1442
Transfer pricing adjustment - computation of profit margin of the assessee - comparable selection - Held that:- The payment of ₹ 2.00 crore to Voltas Ltd. is not a pass through cost, but, a value added cost. We fail to appreciate any difference between the payment made by the assessee to Voltas Ltd. and to its own employees in the context of the so called pass through costs. If the contention of ld. AR that payment to Voltas India Ltd. made exclusively for rendering services by the assessee to its AE is a pass through cost, is taken to a logical conclusion, then the payment to assessee’s own employees, which was also made for the same purpose, should also get a similar tag of a pass through cost. Going a step ahead with the same logic, all other expenses including rent and depreciation should also become pass through costs as these were also incurred in rendering services to the AE. Obviously, it is an absurd proposition. We, therefore, approve the view taken by the TPO in adopting the gross figure of revenue at ₹ 4.24 crore and payment of commission to Voltas Ltd., as a part of operating cost for the purpose of calculating the operating profit margin of the assessee.
Comparable selection - Assessee incorporated to carry on the business of buying, selling, importing, exporting, developing, designing, manufacturing, assembling or otherwise dealing in all kinds of cranes including used cranes and material handling equipments with other related components. This is the first year of the assessee’s business operations - controlled transactions are not contemplated for comparison with the international transaction undertaken by an enterprise - companies functional dissimlar with that of assessee need to be deselected from final list.
Remit the matter to the file of the TPO/AO for confronting the assessee with the calculation of RPT to Sales filter of 25.30%. Apart from that, the TPO will be fully competent to consider the functional similarities/dissimilarities of this company before considering its inclusion or otherwise in the final tally of comparables - Assessee appeal allowed for statistical purposes.
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2016 (5) TMI 1441
Deduction u/s 80IB - two flats were sold to the same persons, namely, Smt. Latha Ramachandran and Shri K. Ramachandran - Held that:- As far as the sale of residential unit to Smt. Latha Ramachandran and Shri K. Ramachandran was concerned, the issue was settled by Madras High Court and now pending before Apex Court. Unless the judgment of Madras High Court was reversed by the Apex Court, there cannot be any reason for the Revenue to reopen the issue once again. Therefore, this Tribunal do not find any justification in disallowing the claim of the assessee merely because two flats were sold to Smt. Latha Ramachandran and Shri K. Ramachandran.
For flats exceeding 1500 sq.ft., a co-ordinate Bench of this Tribunal found that flat Nos.403 & 404, in fact, exceeded 1500 sq.ft. The language employed in Section 80- IB(10)(c) of the Act does not warrant deduction claim altogether if some of the units exceed the specific dimensions. The Tribunal in the earlier assessment year found that consequent disallowance has to be only on proportionate basis. This Tribunal placed its reliance on the judgment of Madras High Court in Arun Excello Foundations (P) Ltd. (2012 (12) TMI 415 - MADRAS HIGH COURT). No reason to confirm the orders of the lower authorities and accordingly, the same are set aside.
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2016 (5) TMI 1440
Reopening of assessment - reopening on the basis of AIR information - notice in the name of dead person - Held that:- Both the parties and carefully gone through the material available on the record. On perusing the assessment order dated 21.3.2013 in the name of Smt. Bimla Devi, deceased through legal heir Shri Chet Ram, it would be clear that the return of income was filed by Shri Chet Ram legal heir of the deceased assessee on 6.11.2012, therefore, the AO was having the knowledge that the assessee had already expired when the return of income was filed on 6.11.2012.
The notice u/s 143(2) and u/s 142(1) dated 05.02.2013 were issued in the name of Smt. Bimla Devi the deceased assessee which had already expired. It is well settled that the issuance of notice u/s 143(2) is the pre-requisite condition for framing the assessment u/s 143(3) of the Act. However, in the present case, it is noticed that the AO issued the notices dated 05.02.2013 u/s 143(2) & 142(1) of the Act in the name of dead person i.e. Smt Bimla Devi. Therefore the assessment framed on the basis of said notice was void- ab initio.
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2016 (5) TMI 1439
Levy of penalty u/s 271(1)(c) - not coming to the conclusion as to the proper limb, which has not been satisfied for issuing notice - Held that:- Penalty proceedings have been initiated in respect of additional income offered. AO had recorded satisfaction that the assessee has concealed its income but had levied penalty on account of concealment of income by furnishing inaccurate particulars of income. Such an order imposing concealment penalty is not sustainable for not coming to the conclusion as to the proper limb, which has not been satisfied.
In respect of second set of penalty i.e. unexplained investment in jewellery and on account of on-money received, penalty proceedings were initiated without mentioning the limb which has not been satisfied by the assessee and penalty has been levied for violation of both the limbs of section and such order imposing concealment penalty is not sustainable and hence, the same is held to be invalid in law. We direct the Assessing Officer to delete penalty levied under section 271(1)(c) of the Act in all the years under appeal. - Decided in favour of assessee.
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2016 (5) TMI 1438
TPA - ALP determination - comparables selection criteria - India USA Double Taxation Avoidance Agreement effect - Held that:- In earlier years, the assessee had taken distributors as comparables, a stand not accepted by the department which used service provider as comparable and that the assessee itself had accepted this stand by going in far MAP proceedings and accepting that decision, the learned TPO has failed to appreciate the fact that for the earlier years, on behalf of associated enterprises, an application was made under Article 27 of India USA Double Taxation Avoidance Agreement (DTAA) to settle the disputes arising from their assessments and it was pointed out that assessments in India resulted in double taxation especially in view of transfer pricing adjustment made in the case of assessee.
In the settlement reached between competent authorities of India and United States, the latter agreed to provide co-relative relief in the assessments of associated enterprises for the transfer pricing adjustment made in the hands of the assessee to avoid double taxation. We thus agree with the submissions of the Learned AR that such act of assessee’s should not be considered as a consent of the assessee about the adjustment proposed by the department in earlier years as the assessee, in good faith had not pressed for any appeal.
We in the interest of justice and to meet out ends of justice set aside the matter to the file of the Assessing Officer to decide the issue afresh after undertaking fresh search of comparable companies. It is needless to mention over here that while deciding the issue afresh, the Assessing Officer will afford opportunity of being heard to the assessee and will meet out the submission of the assessee by speaking order.
Addition on account of interest on borrowed capital amount - Held that:- Under similar set of facts, the ITAT in the appeal of the present assessee for the assessment year 2004-05 had decided the identical issue as held Assessing Officer had not brought on record any material to show that the loan obtained by the assessee under ECB was diverted to group companies. In the absence of such nexus, it cannot be said that amount borrowed for the purpose of business was diverted for non-business purposes. In the absence of any such material on record, in our considered opinion, CIT(Appeals) was justified in deleting the addition on the ground that there was no nexus between the money borrowed and expenses incurred by the assessee - Decided in favour of the assessee.
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2016 (5) TMI 1437
International transaction - ALP adjustment - remittances towards investment in share capital - Held that:- There is no dispute that the assessee had remitted $ 3387182 towards investment in share capital. The shares were allotted to the extent of $ 2654797 in the same AY. The subsidiary company has treated the balance remittance as interest free unsecured loan and repayable on demand in their financial statement. In the next AY, the subsidiary company has allotted the shares on 15/03/2012.
In our considered view, the amount $ 732.385 is towards investment in share capital of the subsidiary outside India and the transactions are not in the nature of international transaction referred to section 92-B of the IT Act and transfer pricing provisions are not applicable as there is no income as well as there is no mutual agreement between the companies for such payment of interest. Moreover, the subsidiary company also disclosed as ‘interest free'
In the similar situation with uncontrolled transaction, the allottee company in normal course of transaction will not be expected to receive any interest leave away the international transaction. Without any certainty or any agreement on receiving any interest but merely relying on the accounting method and disclosure of the subsidiary in their financial statement cannot lead to this transaction as international transaction which require ALP adjustment. - Decided in favour of assessee
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2016 (5) TMI 1436
enefits of original license by legal heirs of deceased - petitioner (legal heir) stepping into the shoes of deceased - the decision in the case of Navedita Prakash Gawade Versus Union of India [2014 (9) TMI 1148 - BOMBAY HIGH COURT] contested - Held that: - no merit in present petition - SLP dismissed.
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2016 (5) TMI 1435
Assessment in the name of non existent company - scheme of amalgamation adopted - Held that:- In view of the decision of this Court in Spice Infotainment v. CIT (2011 (8) TMI 544 - DELHI HIGH COURT) no substantial question of law arises as held that the framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person - no procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B - Decided in favour of assessee.
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2016 (5) TMI 1434
TPA - comparable selection revenue urges that some of the comparables were wrongly rejected and some comparables suggested by the Assessee wrongly accepted by the ITAT - Held that:- ITAT has given detailed reasons. The Revenue is unable to demonstrate that the said reasons qua any of the comparables or the conclusion of the ITAT thereon is perverse. The Court does not find the said issue giving rise to any substantial question of law.
Foreign exchange fluctuation loss being considered as part of the operative expenses, the issue stands covered against the Revenue and in favour of the Assessee by the decision of the Supreme Court in Commissioner of Income-tax v. Woodward Governor India (P) Ltd. (2009 (4) TMI 4 - SUPREME COURT ).
Rate of interest for capital adjustment is covered against the Revenue and in favour of the Assessee in terms of the decision of this Court in Cotton Natural (P) Ltd. v. CIT (2015 (3) TMI 1031 - DELHI HIGH COURT). No substantial question of law arises
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2016 (5) TMI 1433
TPA - comparable selection criteria - Held that:- Assessee is a software solution provider, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Granting credit in respect of advance tax and tds - grievance of the assessee is that the AO has erred in granting credit in respect of advance tax only to the extent of ₹ 6,14,01,877 as against ₹ 6,58,40,000 claimed in the return of income filed by the assessee and also tax deducted at source (TDS) only to the extent of 22,40,040 as against ₹ 23,58,189 claimed in the return of income - Held that:- As these grounds needs factual verification, we remit the issues to the file of the AO for verification and granting of relief if any, in accordance with the law.
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2016 (5) TMI 1432
Detention of goods with vehicle - Section 47(2) of the KVAT Act - Held that: - In Interfield Laboratories v. State of Kerala [2015 (9) TMI 1538 - KERALA HIGH COURT] this Court held that the officer in charge of the notified area or the empowered officer can invoke the provisions under sub-section (2) of Section 47 of the KVAT Act, if he has reason to suspect that goods under transport are not covered by proper and genuine documents or that any person transporting the goods is attempting to evade payment of tax due under the said Act - the finding in Ext.P4 notice is that the consignment was not accompanied by any documents. In such circumstances, the 1st respondent cannot be found fault with in intercepting the goods and issuing Ext.P4 notice under Section 47 (2) of the Act.
If the petitioner is aggrieved by Ext.P4 notice, it is for him to file an appropriate objection before the 1st respondent, along with supporting materials - Pending adjudication, the goods detained pursuant to Ext.P4 notice shall be released to the petitioner, on the petitioner depositing 50% of the total amount demanded in Ext.P4 and furnishing adequate security to the satisfaction of the 1st respondent for the balance sum in the form of a simple bond, with sureties.
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2016 (5) TMI 1431
Monetary amount involved in the appeal - circular dt.17/12/2015 bearing No. F.No.390/Misc./163/2010-JC - Held that: - Taking note of the CBEC Circular dt.17/12/2015 & 01/01/2016, the monetary limits which indisputably in these appeals/reference is less than ₹ 15 lacs, much less than what has been prescribed for filing appeal before the High Courts, deserve to be dismissed as not pressed - appeal dismissed.
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2016 (5) TMI 1430
Penalty proceedings u/s 18(1)(c) - wealth tax assessment - Held that:- There is total non-application of mind by the Wealth Tax Officer while dropping penalty proceedings under section 18(1)(c) and in this regard, the assessment order passed is erroneous and since the amount of penalty leviable has failed to be levied, then the said order is also prejudicial to the interest of Revenue. AR for the assessee vehemently stressed before us that no penalty is leviable under section 18(1)(c) in the hands of present case, in view of Explanation 5 under the said section. Wealth Tax Officer has failed to address the issue at all. Even the assessee had not pleaded any such thing before Assessing Officer. The reply only asks the Assessing Officer to drop penalty proceedings and Assessing Officer refers to the said reply and drops proceedings, without any reasons, either raised by assessee or referred by the Assessing Officer. In the absence of the same, we find no merit in the plea of the assessee in this regard. Since the same needs to be addressed by the Assessing Officer, accordingly, we uphold the order of Commissioner in setting aside the order of Wealth Tax Officer. Hence, the grounds of appeal raised by the assessee are dismissed.
Commissioner power of revision under section 25(1) against wealth tax assessment order passed by the Assessing Officer under section 16(3) of the Act - Held that:- where the money is deposited in the PD Account of Commissioner, which in turn, is held on behalf of the assessee has changed the form from being cash in hand available with the assessee, which was seized by the Department and is now available in the form of bank deposit. Once the form of cash has changed into a bank deposit, the same is not includable in the hands of assessee as cash in hand as on valuation date. In the totality of the above said facts and circumstances of the case, where the amount of cash seized from the assessee is now deposited in PD Account of Commissioner, the same is not includable in the net wealth of assessee as on 31.03.2010. Consequently, the assessment order passed by the Wealth Tax Officer in not including the same in the hands of assessee is not erroneous. In this regard, we find no merit in the exercise of power by the Commissioner for revision of assessment order passed under section 16(3) of the Act.
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2016 (5) TMI 1429
Liability of interest - Held that: - in Trimurti Fragrance Private Limited vs. CCE, Delhi -II [2016 (2) TMI 718 - CESTAT NEW DELHI], it was held that no duty demand or interest could be made on the appellant in similar situations. The Tribunal applied the provisions of the 3rd proviso to Rule 9 and reading it together with the other applicable provisions of the said Rules, came to conclusion that there is no delayed payment warranting levy of interest in such situation - appeal allowed - decided in favor of appellant.
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2016 (5) TMI 1428
Addition of sales inflation figure to the assessee’s income - Held that:- We have requested Mr.Khaitan to find out from the assessment order, the relevant information to show that the assessing officer did not dispute the inflation of the sums indicated by the Tribunal in its order. Mr.Khaitan was unable to show any such thing from the assessment order. Tribunal referred to something in the order of the assessing officer which is not there. The Tribunal without any evidence on record and without any admissible evidence having been adduced by the assessee, directed the assessing officer to exclude the amount of ₹ 2.90 Crores approximately and ₹ 5.90 Crores from the total income of the assessee for two block periods. We are, therefore, convinced that there is lot of substance in the submission advanced by Mrs.Gutgutia that this finding is perverse. We, therefore, add the following question of law :
“Whether the order directing the assessing officer to exclude the amount of ₹ 2,90,43,971 and ₹ 5,90,21,000 being the sales and fictitious income from the total income for the two block periods is perverse ?”
Let the appeal be listed on 16th May, 2016 for hearing.
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2016 (5) TMI 1427
Valuation - Cement - requirement of RSP to be declared - whether cement sold in 50 Kgs packed condition to Builders, Developers, Ready Mix Concrete Manufacturers /Government etc. would come within the category of Institutional consumers? - Held that: - the issue decided in the case of ULTRATECH CEMENT LTD. Versus COMMISSIONER OF CENTRAL EXCISE, INDORE [2014 (9) TMI 966 - CESTAT NEW DELHI], where it was held that cement in 50 Kg bags sold to builders/developers qualifies as sales to institutional consumers and benefit of serial number 1C of N/N. 4/2006-C.E., is available to such clearances - appeal allowed - decided in favor of appellant.
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