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Showing 181 to 200 of 1677 Records
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2016 (9) TMI 1503
Whether for claiming refund of CENVAT credit on the service used as an input service for export of service, there was any time limit within which such application had to be filed as per the then prevailing notification no.5/2006 dated 14.03.2006 which governed the case of the present appellant and consequently whether the Tribunal was right in holding that notification no.14/2016 dated 01.03.2016 was merely clarificatory in nature?
Tax Appeal is ADMITTED for consideration on substantial question of law.
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2016 (9) TMI 1502
Whether Section 451 Cr.P.C. can be applied while considering the plea for interim custody of the vehicle seized under the NDPS Act?
HELD THAT:- There is no specific provision debarring the release of the vehicle seized under the Act. When the provision under Section 451 Cr.P.C. is not inconsistent with any specific provision under NDPS Act, the same will have to be applied as mandated under Section 51 of the said Act.
There was also no specific observation that the vehicles seized under the NDPS Act will have to be treated separately while considering the plea for interim custody thereof.
The provision under Section 451 Cr.P.C. which is found not inconsistent with the provisions of the NDPS Act is applicable to the vehicle seized under the NDPS Act as well. No differential treatment to the vehicle seized under the NDPS Act is contemplated either under the provisions of the NDPS Act or under the ratio laid down by the Court of law.
The vehicle used for transporting the narcotic drugs and psychotropic substances can also be released on sapurdari invoking the provision under Section 451 Cr.P.C. - Reference disposed off.
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2016 (9) TMI 1501
Valuation - cash discount and trade discount given by the job worker to the principal manufacturer - HELD THAT:- It does not appeal to common sense that how cash discount and trade discount shall be admissible to determine the value of the goods cleared by the job worker. It does not make any sense to grant such relief, since final goods are not cleared and this trade practice does not prevail in the industry. Any such discount shall depress the assessable value and shall not determine the assessable value in accordance with law.
Penalty - HELD THAT:- It is appreciable that the interpretational error has brought the appellant to penal consequence of law - The penalty imposed under Section 11AC of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 is waived.
Appeal allowed in part.
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2016 (9) TMI 1500
Disallowance u/s 14A r.w.r 8D - HELD THAT:- One cannot ignore the cost of time used by various staff members as well as officers at the helm of affairs who are required to give sufficient energy to select various scrips and mutual funds and to invest into, selling off or switching off of the investments between various mutual funds arranging of funds out of the already invested funds as well as other services including idle business funds for use of banking services for the specific movement of funds round the year and more importantly towards safeguarding the investments against any possible losses. These all activities involve elements of cost of the company which being not calculable in general, are thus taken care of by third limb of Rule 8-D of the Rules r.w.s. 14A of the Act.
CIT(A) in his order deleting the impugned addition has observed that out of the dividend income of ₹ 8,19,154/- assessee has reinvested ₹ 6,43,206/- and also has observed that long term capital gain of ₹ 14,55,875/- on account of redemption of mutual funds was taxable in nature. Therefore, we are of the view that as against 0.5% of the average investment of ₹ 11.35 crores working out at ₹ 5.67.450/- lump sum disallowance of ₹ 2,50,000/- will be justified towards administrative cost incurred on maintaining investment in shares and mutual funds. Accordingly total disallowance of ₹ 2,80,347/- (Rs.30,347/- + 2,50,000/-) is held to be Asst. Year 2009-10 disallowance u/s 14A of the Act. Accordingly the ground of Revenue is partly allowed.
Interest expenses u/s. 36(l)(iii) - whether once the funds are put into the business, they lose identity - HELD THAT:- As decided in assessee's own case [2014 (5) TMI 81 - ITAT AHMEDABAD] since assessee had sufficient profits generated this year and it had mixed funds and no nexus is established by the AO as to whether investment was made out of interest bearing funds, disallowance of interest cannot be made. Similarly no disallowance out of administrative expenditure can be made as there is no direct nexus. As a result, this ground is allowed.
Disallowance of royalty payment - the said payment was made for the use of trademark - HELD THAT:- As decided in assessee's own case [2014 (5) TMI 81 - ITAT AHMEDABAD] CIT(A) has given a finding on fact that the assessee has not acquired any ownership rights. It has got the right of user only. Since, AY 1989- 90, the user charges claimed as royalty have been allowed in the assessments, the rate of user charges is 1% of the sales during the year under consideration. TDS has been made in respect of royalty payments. As it is a recurring expenditure payable on the basis of sales and the appellant has not acquired any capital asset or permanent right, the payment of royalty is allowable as business expenditure. The Revenue has not controverted this fact by placing any material on record, ground of revenue rejected.
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2016 (9) TMI 1499
Accrual of income - Interest income return reported as inextricably linked with the object of setting up the assessee’s power plant - assessee had advanced money to the contractors for smooth working which was interest bearing out of debt funds - HELD THAT:- This question was considered in a previous year 2008-2009 [2015 (12) TMI 1798 - DELHI HIGH COURT] by a bench of this court which rejected the revenue’s appeal. Likewise, even earlier this court had while relying upon previous binding decisions, rejected the revenue’s appeal . [2015 (2) TMI 1306 - DELHI HIGH COURT]
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2016 (9) TMI 1498
Undisclosed receipt by the assessee - difference as per the credit shown in Form 26AS - HELD THAT:- Under the scheme of Income-tax Act, the assessee is expected to pay tax after completion of assessment. In order to ensure the recovery of tax, the Income-tax Act provides payment of tax in advance, before completion of assessment and also provides for deduction of tax at source. When the payer deducted the tax as per the scheme of the Income-tax Act in respect of the payment made by them, the amount deducted by the payer towards TDS has to be treated as payment of tax.
If the assessee claims that there was wrong entry and wrong credit, the Assessing Officer has to examine the same with open mind and find out whether there was a genuine credit as found in Form 26AS. M/s Tulip Telecom P. Ltd. is also a tax payer in this country. Therefore, the Revenue cannot shift the burden to the assessee on the ground that M/s Tulip Telecom P. Ltd. could not be contacted. M/s Tulip Telecom P. Ltd. is a company registered under the provisions of Companies Act and the Directors can very well be contacted by the Assessing Officer and find out what is the error in TDS return.
This Tribunal is of the considered opinion that even though the burden of proof is initially on the shoulder of the assessee, the Assessing Officer is also equally responsible to find out whether the credit entry found on 01.07.2010 is genuine or not. AO cannot take advantage of the ignorance or handicap of the assessee and say that there was undisclosed receipt by the assessee.
When the assessee claims that the entry as on 01.07.2010 is a wrong entry, the Assessing Officer in all fairness has to examine the same and find out whether there was genuine entry or not. The Assessing Officer was conferred the power of civil court to examine and find out the real nature of transaction. If the Assessing Officer could not exercise the power conferred on him, it is not known how the individual citizen of this country will be able to find out the genuineness of the transaction. - Matter restored before the tribunal.
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2016 (9) TMI 1497
Disallowance of deduction u/s.80-IA - initial assessment year in section 80-IA(5) would only mean the year of commencement and not the year of claim ? - Unabsorbed depreciation - HELD THAT:- This issue is squarely covered by the order of the jurisdictional High court in the case of Velayudhaswamy Spinning Mills (P) Ltd vs. ACIT [2010 (3) TMI 860 - MADRAS HIGH COURT] There is no dispute that during the year, there is a profit. Therefore, the assessee claimed deduction under section 80-IA and the Revenue has no authority to notionally bring forward the unabsorbed depreciation and loss of the earlier year which has been already set off as against the current year profit from the unit.
Initial assessment year cannot be the year in which the undertaking commenced its operations and in this case, the initial assessment year is the assessment year in which assessee has chosen to claim deduction under section 80-IA. Hence, the provisions of section 80-IA(5) treating undertaking as a separate sole source of income cannot be applied to a year prior to the year in which the assessee opted to claim relief under section 80-IA for the first time. Depreciation and carry forward loss relief to the unit which claims deduction under section 80-IA, cannot be notionally carried forward and set off against the income from the year in which the assessee started claiming deduction under section 80-IA - Decided in favour of the assessee
Writing off trade advance as revenue expenditure in terms of Section 37 - HELD THAT:- Amount paid by the assessee to M/s. Cibi International for the purpose of establishing and maintaining infrastructure facilities for manufacture of knitted garments and if M/s. Cibi International maintains the said facility exclusively for the benefit of assessee, the assessee cannot claim the same as refund. On the other hand, if the M/s.Cibi International failed to maintain the said facility, for the exclusive benefit of assessee for a period of 10 years than the assessee has a right to claim the same as refund. The same was examined by the Tribunal on earlier occasion for assessment year 2010-11 and it was allowed as deduction in the hands of assessee u/s.37 - we are not in a position to take contrary view as a judicial discipline requires consistency in its proceedings.- Decided in favour of the assessee
Deduction towards cost of building construction on leasehold land as a revenue expenditure - D.R contended that the assessee constructed the building in the leased land and it is not the case of renovation of the leased building or improvement of the leased building - HELD THAT:- AO has to see that the expenditure incurred on construction of any super structure on the leasehold land resulted in savings of any revenue expenditure in the form of monthly rent at the subsequent stage in future or not. Since there is no finding by the lower authorities regarding savings of the future revenue expenditure by the assessee so as to say it is a Revenue expenditure. As such, we are not in a position to appreciate the facts of the case. Accordingly, we remit the issue to the file of AO to decide the issue afresh
Penalty imposed u/s.271(1)(c) - assessee structured the whole transaction with respect to intangible assets and wrong claim of depreciation with the motive to reduce the tax liability. Against this, the Revenue is in appeal before us - CIT-A deleted penalty - HELD THAT:- It is preposterous to decide the issue of penalty levied u/s.271(1)(c) at this stage, since certain issue relating to addition of deletion by the CIT(A) are remitted by us to the file of AO for fresh consideration for the assessment year under consideration. Hence, at this stage, the assessment order on the basis of which penalty has been levied, still the subject matter of litigation, which is not . Hence, in our opinion, the AO is at liberty to initiate the penalty proceedings only after giving effect to the Tribunal order by him in the issue of quantum addition. Accordingly, we vacate the penalty order at this stage. As such we dismiss this appeal of Revenue as infructuous.
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2016 (9) TMI 1496
Unexplained cash credit u/s. 68 - establishment of identity of the creditor, his capacity to advance the loan and the genuineness of the transaction - HELD THAT:- AO in the present case has found fault with the capacity of the donors to give the gift in question to the Assessee. As we have already observed, the burden cast on the assessee stands discharged the moment the assessee proves the identity of the creditor, his capacity to lend and the genuineness of the transaction. The assessee cannot be further required to prove the source of the source of the money out of which gift was given as laid down by the Hon’ble Madras High Court in the case of S.Hastimal Vs. CIT [1962 (12) TMI 60 - MADRAS HIGH COURT].
In the present case, as already seen that the donors been accepted. The source of the donors cannot therefore be gone into in the assessment of the Assessee. Therefore, of the view that the addition made u/s.68 in the facts and circumstances of the present case cannot be sustained. The same is directed to be deleted. The appeal of the Assessee is allowed.
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2016 (9) TMI 1495
Condonation of delay - delay of 395 days - sufficient cause of delay - reasons mentioned for delay in filing the appeal before the ITAT are that the assessee’s attention was diverted due to criminal cases and pre-occupation in the business activities - HELD THAT:- In the present case, the assessee could have very well avoided the delay by exercising of due care and attention at least after the month of March’2013, we are of the considered opinion that there exists no sufficient and reasonable cause for the delay of an inordinate period of 395 days we are not inclined to condone the said delay in filing the appeal before us. Accordingly, the appeal filed by the assessee is dismissed as barred by limitation.
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2016 (9) TMI 1494
Income recognition - percentage completion method OR project completion method - AO adopting percentage completion method for recognizing the income of the assessee instead of project completion method chosen by the assessee - case of the Revenue is that Accounting Standard 7 (A.S. 7) is mandatory and hence the assessee should have adopted percentage completion method - HELD THAT:- We find that the assessee is a real estate developer and not a contractor as held by the Ld.CIT(A). A.O. in both the Assessment Years (A.Y.) has accepted the claim of the assessee that it is in the real estate business. On these facts we respectfully follow the decision of the Mumbai Bench of the ITAT in the case of Haware Constructions P.Ltd. vs. ITO [2011 (8) TMI 1080 - ITAT MUMBAI].
Respectfully following the same we hold that A.S.-7 does not apply to the facts of the case. Hence the system of accounting followed by the assessee consistently over the years has to be upheld. - Decided against revenue.
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2016 (9) TMI 1493
Deemed Dividend and taxability u/s 2(22)(a) - transfer of shares is the case of “disguised distribution of accumulated profits - HELD THAT:- Ultimate beneficiaries of the impugned transaactions are again the same individual of the shroff family. We don't find any benefit accrued to them in any manner. Therefore, the analysis of the provisions of clause (a) of section 2(22) reveals that the same are inapplicable to the share transaction under consideration. In our opinion, the CIT (A) has randomly applied these provisions invalidly and without having any strength of explicit legal provisions. There are no provisions for taxing the so called indirect benefit accrued to the shareholders of the company and provisions of section 2(22)(e) and the that of the section 64 helps the assessee. We direct the AO to delete the addition on this account.
Taxability of donor companies u/s 115-O - HELD THAT:- CIT (A) exceeded his jurisdiction in directing the AO to tax the donor companies u/s 115-O of the Act, which may be consequent one, but they are not the subject matter of appeals before him. Therefore, we order for deletion of such direction. Therefore, further, we direct the AO to delete the addition on this account.
Gift and its taxability u/s 56(2)(vii) - transaction of gift of UPL and UEL shares to NCPL as a colourable device - HELD THAT:- The assessee is the donor and not the receiver as per the transfer agreement honoured by the revenue authorities. Therefore, in our view the said provisions are not applicable to the facts on record. CIT's conclusions relating to the indirect transfer of benefit suffers from the lack legislative support in any form. Therefore, we direct the AO to delete the addition on this account.
The donor and donee of the benefit are the same. On this factual matrix, we do not find any indirect benefit unfairly accrued to the assessee-individual. Even if the transfer is not bonafide, we find it is case of donating share with right hand and receiving the benefit from the left hand of the same individual. In our view, the conclusion of the CIT(A) is far stretched and unsustainable. Therefore, the allegation of colourable device and applying the judgment of the Apex Court in the case of McDowells [1985 (4) TMI 64 - SUPREME COURT] is randomly and erroneously done. Thus, we dismiss the conclusions of the CIT (A).
The transfer agreement dated 26.2.2010 needs to be considered as the “gift agreement” as title is not determinative and for this, we rely on the Honble Bombay HC judgment in the case of NCPL [2014 (4) TMI 480 - BOMBAY HIGH COURT] and Gujarath High Court's judgment in the case of Prakriya Pharmachem [2016 (1) TMI 946 - GUJARAT HIGH COURT].
So far as the assessee is concerned, the impugned transactions are covered by the provision of section 47(iii) of the Act as prima facie held by the said judgments. There is no case of invoking the provisions of section 2(22)(a) on the assessee-individual. Similarly there is no case for direction to AO for invoking th provisions of section 115- 0 of the Act on the donor companies where the Shroff family members are the share holders. Finally we disapprove the CIT(A)‟s claim of colourable device in these cases of individuals. Considering the same, we are of the opinion that the grounds raised by the assessee are required to be allowed in favour of the assessee.
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2016 (9) TMI 1492
Clandestine manufacture and removal - MS Ingots - main basis of allegation is that there has been higher consumption of electricity and ingot moulds, and as such, the respondent did not account all the production of excisable goods - Held that:- Revenue contended that life cycle of mould was not correctly considered by the original authority. In the project report, the life of mould is shown as 240 heats. We find the allegation of excess production cannot be made on the basis of project report or presumed life span of moulds without any corroborative evidence.
Electricity consumption - Held that:- In the absence of categoric evidence regarding excess serviceable life of ingot moulds, the demand cannot be sustainable merely on the basis of higher consumption of electricity.
There is no justification to interfere with the findings of the original authority - appeal dismissed - decided against Revenue.
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2016 (9) TMI 1491
Requirement to produce the documents - it was the case of the Appellant before the Court that it was impossible for him to return the documents handed over to him as the said documents were handed over by him to the rightful owner of the documents and the documents were also destroyed - Section 2(b) of the Contempt of Courts Act, 1971 - Held that:- In the instant case, it is an admitted fact that the documents had been handed over by the Appellant to his mother, Late Sharda Bai, who was the rightful owner of the said documents and the said fact was admitted by his mother by filing an affidavit in another legal proceedings. Subsequently, the said documents had been destroyed because of the flood and therefore, it was impossible for the Appellant to return the same to the Court.
Section 2(b) of the Contempt of Courts Act, 1971 and its perusal makes it very clear that so as to hold somebody guilty of contempt of court, the concerned person must have willfully disobeyed any judgment, decree, direction, order, writ or any other process of a court or should have willfully committed breach of an undertaking given to a court.
In the instant case, from the facts stated hereinabove, it is crystal clear that the Appellant had no intention of committing breach of the undertaking given to the court. It was physically impossible for the Appellant to produce the documents as the documents had already been given by him to his mother, on whose behalf he had collected the same from the court and the said documents had been subsequently destroyed because of a natural calamity - It is deplorable that the Appellant has been held guilty and has also undergone the sentence imposed by the High Court. We hold that the Appellant was not guilty of committing contempt of court as there was no willful breach of the undertaking given to the court - appeal allowed.
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2016 (9) TMI 1490
Penalty u/s 271(1)(c) - Disallowance of a sum being power purchase price which was not debited by the assessee in its books of account as expenditure but claimed as deduction in the computation of the total income - Held that:- Hon’ble Bombay High Court in CIT Vs. Nayan Builders and Developers [2014 (7) TMI 1150 - BOMBAY HIGH COURT] has also held that where High Court admitted substantial question of law in respect of which penalty was levied the impugned order of penalty was to be deleted. Therefore, respectfully following the decisions of Hon’ble High Court we hold that when the issue is admitted by Hon’ble High Court as substantial question of law in the case of the assessee on disallowance of ₹ 261406249/- for power purchase price difference, no penalty u/s 271(1)(c) can be levied.
We are of the view that consistent approach should have been taken by revenue in this case for this year too. Hon’ble Supreme Court in case of CIT Vs. Reliance Petro Products Ltd [2010 (3) TMI 80 - SUPREME COURT]] has stated that a mere making of the claim which is not sustainable in law by itself does not amount to furnishing of inaccurate particulars regarding the income of the assessee and does not invite penalty u/s 271(1)(c) - In the present case also the assessee has disclosed full facts about the claim made in the computation of total income filed. Further, detailed explanation about the power purchase price was given in notes to accounts in Schedule 16 of its annual account. Therefore, it cannot be said that the assessee has furnished inaccurate particulars of its claim. It also cannot be said that the claim of the assessee is not a bona fied claim because of the past history of such claim being allowed to the assessee by the tribunal. No infirmity in the order of the CIT(A) in deleting the penalty of ₹ 8.80 crores u/s 271(1)(c) of the Act.- Decided in favour of assessee.
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2016 (9) TMI 1489
Addition based on loose papers as found at the time of search operation - corroborative and concrete evidence against the assessee - Held that:- No search was carried out in the premises of Shri Pukhraj Soni and no loose paper/ hundi/ documents/ promissory note/ cash book or cash flow statement were found or seized, which could prove the movement of cash to & fro between Shri Pukhraj Soni & Shri Nilesh Ajmera with respect to interest and loans. We find that the AO failed to bring on record any corroborative and concrete evidence against the assessee which could prove that the assessee has advanced money to Shri Nilesh Ajmera. The inference of the AO that the assessee has advanced the money is merely based on suspicion, surmises and conjectures and there was no material to support the conclusion of the AO that the assessee has advanced the money. We derive support from the decision in the case of Dhakeshwari Cotton Mill Pvt.Ltd. vs. CIT, [1954 (10) TMI 12 - SUPREME COURT], wherein it was held that while making an assessment there must be something more than the bare suspicion to support the assessment.
In another case of K.P. Varghese vs. ITO, [1981 (9) TMI 1 - SUPREME COURT] has held that mere seizure of note books of documents at the personal residence of an employee would not conclude the issue against the employer company that the on money has been received by the employer company. The onus of proving the charging of on money lies on the Revenue. - Decided in favour of assessee
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2016 (9) TMI 1488
TPA - Comparable selection - functional similarity - Held that:- Assessee is into providing software development services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Non considering write off of liability provision in computing AL operating mark on cost - Held that:- As decided in SONY INDIA (P) LIMITED. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 9 (1) [2008 (9) TMI 420 - ITAT DELHI-H] excess provision written back in the P&L account is forming part of operating profit of the assessee. We direct the AO/TPO that excess provision written back in the P&L account should be accepted as forming part of operating profit of the assessee.
Including cost reimbursement of expenses received from associated enterprises part of operating cost and operating income in computation of ALP - Held that:- As the issue in dispute was regarding reimbursement of expenses and since full details were not available on record regarding these expenses in that case, the matter was restored back to the file of the AO/TPO for detailed verification. In the present case, this is not in dispute that full details are not available and therefore, this Tribunal order in LG SOFT INDIA (P.) LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 12(2) [2013 (9) TMI 191 - ITAT BANGALORE] is not relevant in the present case.
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2016 (9) TMI 1487
Valuation of goods - manufacture and supply of Industrial gases viz. Oxygen, Nitrogen, Hydrogen, Helium, Argon and also mixture of these gases - inclusion of cylinder rental and maintenance charges - inclusion of excess amount of transportation charges - classification of the medical grade oxygen - Cenvat Credit in respect of cryogenic tank - Held that:- Learned counsel for the appellant is granted four weeks’ time to do the needful failing which the appeals shall stand dismissed without further reference to the Court.
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2016 (9) TMI 1486
CENVAT Credit - input service - Business Exhibition Service - Held that:- As the Business Exhibition Service has been availed by the appellant for display of goods in exhibition which is ultimately business promotion activity. Therefore, the said activity is having the nexus of the manufacturing business of the appellant - the appellant is entitled to take Cenvat credit on Business Exhibition Service during the period of 2009-2010 - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1485
Classification of computer peripherals and accessories for the purpose of depreciation - whether P.O.S. terminal, is a computer or alternatively falls within the classification of computer peripherals and accessories ? - Held that:- This court notices that for the relevant assessment year i.e. AY 2008-2009 even though the AO held that the equipment was neither computer nor it could be computer accessories, the CIT (A) overturned that decision and held that the assessee was entitled to 60% depreciation. The CIT (A) was of the opinion that the equipment was akin to a computer. That determination has been concurred to the ITAT. No substantial question of law.
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2016 (9) TMI 1484
TPA - comparable selection - functinal similarity - Held that:- Assessee is a global business provider, in the assessment year under consideration, was providing design engineering, management consultancy services across the built and nature environment worldwide. The company provided services to transform the built environment and restore the natural environment and its expertise ranged from environmental remediation to urban planning from engineering iconic buildings to designing sustainable transport networks and from developing the energy sources of the future to enabling new ways to extracting essential resources.
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