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Showing 201 to 220 of 1466 Records
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2023 (1) TMI 1266
Penalty levied u/s 271(1)(c) - Defective notice - not strike off the appropriate portion of the notice specifying the charge of the penalty - HELD THAT:- CIT(A) has deleted the penalty on the ground that the AO did not strike off the appropriate portion of the notice specifying the charge of the penalty. This fact has not been disputed by the Revenue.
In such circumstances when the relevant limb of penalty notice is not ticked specifying the charge of the assessee, it has been held in various case laws as referred above in CIT(A)’s order, the penalty notice is invalid. Hence, on this count only, we do not find any infirmity in the order of the CIT(A). We hold that the CIT(A) is correct in holding that in such circumstances, the penalty levied is not sustainable. Appeal by the Revenue stands dismissed.
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2023 (1) TMI 1265
Request for refund rejected on the ground of time limitation - Availment of alternative remedy - HELD THAT:- It is trite that alternative remedy itself is no reason to reject a writ petition when it can be shown that the impugned orders are ex facie contrary to the settled propositions, including positive directions by the higher Courts. If it is undisputed that the limitation for the petitioner’s subject refund applications expired during the period between 01.03.2020 and 28.02.2022, the petitioner would be entitled for an extended limitation of ninety [90] days from 01.03.2022 and the applications are within this time, this Court is of the considered view that the impugned order sustained.
The petition is allowed quashing the impugned orders dated 20.07.2022 in Nos.44/2022, 45/2022 and 46/2022 (Annexures – A, A-1 and A-2) by the third respondent and the petitioner’s refund applications are restored for reconsideration.
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2023 (1) TMI 1264
Continuance of the pending proceedings once the proceedings commenced by institution of application Insolvency Resolution Proceedings - HELD THAT:- A reading of the provisions under section 13 and 14 of the Code along with the decision in Ghanashyam Mishra And Sons [2021 (4) TMI 613 - SUPREME COURT] clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders.
At any rate, for the time being, these appeals cannot be proceeded with during the continuance of the proceedings under the Code. Depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps if any, may be taken by the appellant/respondent. We, therefore, granting leave to the appellant/respondent in this appeal to seek the restoration of the appeals, if necessitated by the orders in the Corporate Insolvency Resolution Proceedings, dismiss the appeals in limine. We derive support for the above proposition from the decision in the case of Mahavir Roads & Infrastructure Pvt. Ltd.,[2022 (6) TMI 1294 - ITAT MUMBAI]
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2023 (1) TMI 1263
Disallowance of foreign exchange loss by the AO and confirmed by the DRP - HELD THAT:- As relying on case Woodward Governor India [2009 (4) TMI 4 - SUPREME COURT] we direct the Assessing officer to delete the addition of foreign exchange loss.
ESOP scheme & expenditure and provisions of law on the allowability of claim - HELD THAT:- We found that in the case of CIT(LTU) VS M/S Biocon Ltd [2020 (11) TMI 779 - KARNATAKA HIGH COURT] as held deduction of discount on ESOP over the vesting period is in accordance with the accounting in the books of accounts, which has been prepared in accordance with Securities And Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. Assessee has incurred a definite legal liability and on following the mercantile system of accounting, the discount on ESOPs has rightly been debited as expenditure in the books of accounts. We are in respectful agreement with the view taken in PVP Ventures Ltd. [2012 (7) TMI 696 - MADRAS HIGH COURT] And Lemon Tree Hotels Ltd. [2015 (11) TMI 404 - DELHI HIGH COURT] Decided in favour of assessee.
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2023 (1) TMI 1262
Rectification u/s 254(2) - whats apparent mistake rectifiable? - HELD THAT:- We find that Hon’ble Delhi High Court in the case of Ras Bihari Bansal [2007 (4) TMI 47 - HIGH COURT, NEW DELHI] has held that an oversight of a fact cannot constitute an apparent mistake rectifiable u/s. 254(2) of the Act. It has further held that failure of the Tribunal to consider the argument advanced by either party for arriving at a conclusion, is not an error apparent from record, although it may be an error of judgment. In the grab of an application for rectification it is not permissible to the parties to reopen and reargue the whole matter.
We further find in the case of P.T. Manuel & Sons [2021 (3) TMI 435 - KERALA HIGH COURT] has held that the power of rectification is not akin to that an appeal or even a review and that merely because there is wrong or erroneous order or wrong appreciation of facts the same cannot be grounds for rectification though they could be grounds for appeal.
The Hon’ble Apex Court in the case of CIT vs Reliance Telecom Ltd. [2021 (12) TMI 211 - SUPREME COURT] has held that while considering the application u/s. 254(2), Tribunal is not required to revisit its earlier order and to go into detail on merits. The power u/s. 254(2) are only to rectify/correct any mistake apparent from the record. It has further held that if the order passed by the Tribunal was erroneous on merits, in that case the remedy available to the assessee was to prefer an appeal before the High Court.
Since the assessee has failed to point out any mistake apparent from record as contemplated u/s. 254(2) of the Act, we are not inclined to recall the order and thus the miscellaneous application of the assessee dismissed.
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2023 (1) TMI 1261
Reopening of assessment u/s 147 - procedure prescribed for reassessment - intra Court appeal by the Revenue against the order of this Court - Non furnishing of reasons - Without passing the preliminary order, AO has passed the final assessment order - HELD THAT:- After receipt of the letter A.O. has called the assessee for final hearing keeping in view the paucity of time. No explanation is forthcoming as to why the reasons were not furnished, though it is an admitted position that reasons were sought as back as in April 2018. The order sheet and assessment order clearly indicate that entire proceeding has been hurriedly completed between 18.12.2018 and 28.12.2018 in order to complete the same within the time limit i.e. 31.12.2018.
This Court by following the authority in GKN Driveshafts [2002 (11) TMI 7 - SUPREME COURT] has held that procedure is mandatory. The dates and events recorded by us hereinabove clearly indicate that from April 2018 to December 2018, the A.O has not taken any action which is more or less similar in the case of Deepak Extrusions [2017 (3) TMI 1257 - KARNATAKA HIGH COURT]. The Hon’ble single Judge has rightly noticed in para 8 of the impugned order that by no stretch of imagination, it could be held that speaking order is passed by the A.O considering the objection raised by the assessee.
The writ petition has been allowed by following the decision in the case of Deepak Extrusions. This is an intra-court appeal. There is no patent error to interfere with the view taken by the Hon’ble Single Judge more so, when a Division Bench of this Court following an authority of the Hon’ble Supreme Court of India has held that provision is mandatory in nature. Decided against revenue.
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2023 (1) TMI 1260
Taxability of Inland Haulage Charges (IHC) - Income taxable in India - HELD THAT:- Having gone through the decision of this Tribunal in earlier year, we note that the issue arising in the present appeal is identical and recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of Tribunal for preceding assessment years. As decided in own case [2022 (9) TMI 1388 - ITAT MUMBAI] IHC, since, forms part of income from operation of ships in International Traffic, is covered under Article-9 of the India-France Tax Treaty, accordingly, not taxable in India. These grounds are decided allowed.
Taxability of freight charges from transportation of cargo through feeder vessels - HELD THAT:- As decided in own case [2022 (11) TMI 379 - ITAT MUMBAI], we uphold the plea of the assessee and direct the AO to delete the addition on account of freight charges for transportation of cargo through feeder vessels.
PE in India - treating the agent of assessee in India as permanent establishment of the assessee - HELD THAT:- As decided in assessee own case [2022 (9) TMI 1388 - ITAT MUMBAI] as factually demonstrated that the payment made by the assessee to its indian agent is at the arm's length price of 18%. That being the case, following the aforesaid decision of the Co-ordinate Bench, we hold that the Indian Agent of the assessee cannot be considered as an agency PE. Thus, grounds are decided in favour of the assessee.
Non-taxability of income in the nature of IT support services (“FTS”) - According to assessee FTS arising from IT Services is not taxable in the light of beneficial provision in India – France tax treaty - HELD THAT:- As assessee contends that the income which has been offered to tax by the assessee in return of income, was not taxable. However, AO did not entertain such a claim on the ground that assessee has not filed any revised rate of interest making such claim. For saying so, the AO relied on the decision of Goetz India [2006 (3) TMI 75 - SUPREME COURT] but it has not precluded this Tribunal to admit such a claim even if not raised before the AO. So we admit these grounds of appeal and since, this issue require fresh determination, we deem it appropriate to restore the same to Assessing Officer for de-novo examination.
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2023 (1) TMI 1259
Prayer for appointment of a sole arbitrator to adjudicate the disputes which have arisen between the parties - Section 11 of the Arbitration & Conciliation Act, 1996 - HELD HAT:- It is not a universal principle that every case calls for the appointment of an arbitrator and that any and all disputes should be decided by the arbitrator. The courts act as a doorkeeper where entry is permitted for all the disputes but the doorkeeper can restrict the entry if certain specific criteria as laid down in the aforementioned judgments are not met. Reliance can be placed upon the decision of the Supreme Court in DLF Home Developers Limited -v- Rajapura Homes Pvt. Ltd. & Anr. [2021 (9) TMI 1053 - SUPREME COURT] wherein it was clarified that this Court or a High Court, as the case may be, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen arbitrator. On the contrary, the Court(s) are obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act. Such a review, as already clarified by this Court, is not intended to usurp the jurisdiction of the Arbitral Tribunal but is aimed at streamlining the process of arbitration. Therefore, even when an arbitration agreement exists, it would not prevent the Court to decline a prayer for reference if the dispute in question does not correlate to the said agreement.”
Reference can also be made to the apex court’s decision in BHARAT SANCHAR NIGAM LTD. & ANR. VERSUS M/S NORTEL NETWORKS INDIA PVT. LTD. [2021 (3) TMI 447 - SUPREME COURT] wherein the court held that adjudication of the limitation issue at the referral stage does not tantamount to stepping into the arbitrator’s jurisdictional territory.
Whether the claims here are exfacie time barred and therefore, falls under the restrictive category of deadwood? - HELD THAT:- To determine the starting point of cause of action and ascertain the expiry of the limitation period, this Court finds it pertinent to refer back to the judgment of the Supreme Court in BHARAT SANCHAR NIGAM LTD. & ANR. VERSUS M/S NORTEL NETWORKS INDIA PVT. LTD. [2021 (3) TMI 447 - SUPREME COURT] wherein it made explicitly clear that a notice invoking arbitration must be sent by the claimant party within three years from the date on which the escalation claim is rejected.
It is now well settled that the claims in the present petition are exfacie time barred. However, as a last ditch effort Mr. Mitra contended that since the respondent in its letter dated April 10, 2021 had themselves appointed the arbitrator, the question regarding the existence of any dispute does not arise anymore. In my view, limitation is not something to be decided by the consent between the parties, but it is something which is statutorily mandated and judicially enforced. If there is a boundary drawn by the legislature and enforced by the judiciary, parties cannot act outside of it on the grounds that their consent should be the primary consideration in such cases. While this Court accepts that appointment of arbitrator by the respondent is impermissible but that would not permit the parties to venture beyond the boundaries of limitation.
Thus, it is patently clear that the claim giving rise to the present dispute is ex-facie time barred and falls within the limited category of deadwood. Resultingly, the reference to arbitration is hereby declined - application dismissed.
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2023 (1) TMI 1258
Fraudulent activities under SEBI - issue of 80,800 false share certificates, forging signatures of genuine investors on the transfer documents and verifying fake share certificate and forging signatures and approving fraudulent transfer etc. - WTM passed ex-parte ad-interim order - appellants were Directors and Promoters in company in the business of non-banking finance and also a stock broker on NSE and BSE - contention of the appellant is, that the impugned order was passed ex-parte without giving an opportunity of hearing - HELD THAT:- We find that the impugned order is an ex-parte ad-interim order which has been passed in terms of Section 11 in the interest of the investors. We find that admittedly the order directing the appellant to make an open offer as per the order dated 27th July, 2010 has not been complied with for more than ten years and, therefore, direction was given to the appellants to complete the process of the open offer within 60 days. Such direction so issued does not suffer from any error of law nor does the order amounts to penalising the appellant again for the same cause of action.
WTM has calculated the value of the open offer and the amount which is to be paid to the shareholders/investors in terms of Regulation 15(2) of the Delisting Regulations. This amount was directed to be deposited as a safeguard which could eventually be utilised accordingly as and when the appellants makes the open offer. The amount so calculated is a tentative figure and if objected by the appellant can be rectified and revised on the basis of evidence that would be furnished by the appellant while passing a final order. It is for the aforesaid purpose that the appellant was given an opportunity to show cause as to why appropriate directions should not be issued under Section 11 and 11B.
Thus WTM was justified in passing an ex-parte ad-interim order which can be modified provided an application is filed by the appellant objecting to the calculation. No manifest error in the order passed by the WTM.
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2023 (1) TMI 1257
Necessity of going into the merit of the claim made by the petitioner - in respect of the same Corporate Debtor, another petition admitted - HELD THAT:- Corporate Insolvency Resolution Process cannot be initiated against a Corporate Debtor that is undergoing a corporate insolvency resolution process. However, needless to add, the Petitioner would be entitled to file its claim before the Insolvency Professional, namely, Mr. Shaikh Nafis Anjum (Email Id – [email protected]), Reg. No: IBBI/IPA-003/IP-N00211/2018- 2019/12363 in accordance with law which shall be duly considered.
Petition disposed off.
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2023 (1) TMI 1256
Deletion/modification of condition on which regular bail was granted - deletion of condition of providing bank guarantee of an amount of Rs.3 Crore, for a period till final disposal of the case - HELD THAT:- On going through the averments made in the application that the applicant is in jail since September, 2022 and during his jail period, his conduct is also good. Keeping in mind the offence alleged, the application deserves to be allowed by modifying the condition imposed by Chief Judicial Magistrate, Vadodara.
The application is hereby allowed and the Condition imposed by Chief Judicial Magistrate, Vadodara vide order dated 14.12.2022 is hereby modified to the extent that the applicant is ready and willing to furnish bank guarantee of Rs.1.5 Crore, before Chief Judicial Magistrate, Vadodara, within period of two months from the date of receipt of the order of this Court. However, rest of the conditions imposed by Chief Judicial Magistrate, Vadodara remain intact.
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2023 (1) TMI 1255
Reopening of assessment u/s 147 - petitioner had approached the court for intervention on the ground that the impugned notice issued u/s 148 was without jurisdiction - HELD THAT:- It is pertinent to note that AO in the assessment order has adverted to the fact that the petitioner had, in fact, filed a return.
AO, after examining the matter, concluded that the taxable income declared by the petitioner while filing the return, which was pegged at Rs.1,96,430/- is in order and, accordingly, accepted the same.
Resultantly, there is no tax liability foisted on the petitioner.Therefore, in our view, this writ petition need not progress further.
Accordingly, the interim order dated 11.12.2019 shall stand vacated.
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2023 (1) TMI 1254
Revision u/s 263 - Deduction u/s 80P - interest income derived from parking of surplus funds in fixed deposits - HELD THAT:-This tribunal’s recent coordinate bench’s order in Rena Sahakari Sakhar Karkhana Ltd [2022 (1) TMI 419 - ITAT PUNE] as respectfully follow the view taken by case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [2017 (7) TMI 1049 - KARNATAKA HIGH COURT] and State Bank Of India[2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein it was observed that the interest income earned by a co-operative society on its investments held with a cooperative bank would be eligible for claim of deduction u/s.80P(2)(d) of the Act.
AO while framing the assessment had taken a possible view, and allowed the assessee’s claim for deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 of the Act for dislodging the same. Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers u/s 263 of the Act, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3) - Assessee appeal allowed.
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2023 (1) TMI 1253
Addition u/s 56(2)(x) - stamp duty value was more than the value of consideration shown in the conveyance deed - HELD THAT:- Respective allotment letters issued to the assessee should be considered as “Agreement to sell” for the purposes of sec.56(2)(x) - Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisos to sec.56(2)(x) shall apply to the facts of the present case.
Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec.56(2)(x) of the Act. Hence the AO was not justified in considering the stamp duty valuation as on the date of execution of agreement to sell.
Details of stamp duty value as on the date of respective allotment letters was not brought on record. Since we have held that the stamp duty valuation as on the date of respective allotment letters should be considered for the purpose of sec.56(2)(x) of the Act, it is imperative on the part of the assessee to show that the actual consideration was equal or less than the stamp duty valuation as on the date of issue of respective allotment letters. Accordingly, we are restoring this issue to the file of AO for the limited purpose of comparing the actual sale consideration with the stamp duty valuation as on the date of respective allotment letters. In the limited set aside, the AO shall take appropriate decision in accordance with law after affording adequate opportunity of being heard. Appeal of the assessee is allowed as above.
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2023 (1) TMI 1252
Capital gain - Addition u/s 50C - addition by taking the value as per Stamp valuation Authority instead of actual sale consideration - HELD THAT:- Addition as made by the AO is wrong because if the AO was of the view that any addition was to be made owing the sale consideration being lower than the stamp value, then he is duty bound to refer to the DVO for determining the market value of the property and only then the addition could have been made.
CIT(A) decided the appeal ex-parte when the assessee did not appear on the various dates given. Assessee on the other hand pleads that it could not avail respond as the notices could not be served to the assessee.
Where the AO want to substitute the value of Stamp Valuation Authority in place of actual sale consideration then the issue has to be referred to DVO first for ascertaining the value of the property, only then the addition can only be made after giving a fair opportunity to the assessee. This is the ratio laid down in the case of Sunil Kumar Agarwal [2014 (6) TMI 13 - CALCUTTA HIGH COURT] Appeal of the assessee is allowed for statistical purpose.
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2023 (1) TMI 1251
Seeking grant of bail - Smuggling of iphones - bail was granted by the High Court [2022 (12) TMI 1114 - BOMBAY HIGH COURT] - Seeking permission for withdrawal of SLP - HELD THAT:- The special leave petition stands dismissed as withdrawn.
Seeking grant of bail - creation of fake firms for availing and passing of fake/ ineligible Input Tax Credit (ITC) to facilitate existing beneficiary firms - HC [2023 (2) TMI 978 - RAJASTHAN HIGH COURT] held that Taking into consideration the investigation and evidence so collected, the trial will take considerable time and it may happen, if denied bail, the judicial custody be prolonged beyond the statutory period of punishment which is for five years - HELD THAT:- Interference with the impugned judgment not required - SLP dismissed.
Seeking provisional release of the seized goods - to whom / any person - iPhones - Respondent’s ownership of such goods itself is seriously disputed - contravention of Section 110 A of the Customs Act, 1962 - HC [2022 (9) TMI 447 - BOMBAY HIGH COURT] held that the Tribunal has in fact committed an error in importing the definition of an ‘importer’ as defined under Section 2(26) of the Act and reading the same in Section 110A of the Act - HELD THAT:- Application seeking exemption from filing C/C of the impugned judgment is allowed - Issue notice returnable in four weeks.
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2023 (1) TMI 1250
Seeking grant of bail - evasion of tax based on false calculation - forging of documents - compounding of offences - HELD THAT:- Recently, the Hon’ble Supreme Court of India has, in case of RATNAMBAR KAUSHIK VERSUS UNION OF INDIA [2022 (12) TMI 263 - SUPREME COURT] has held that in a case of the present nature, the evidence to be tendered by the respondent would essentially be documentary and electronic. The ocular evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing. Therefore, keeping all these aspects in perspective, in the facts and circumstances of the present case, we find it proper to grant the prayer made by the petitioner.
In present case, the petitioner is in custody since 21.07.2022 and charge sheet has been filed on 16.09.2022. Taking into consideration the contentions advanced by learned counsels for the respective parties and especially the law laid down by the Hon’be Supreme Court of India in case Ratnambar Kaushik; but, without expressing any opinion on the merits of the case, this Court deems it just and proper to enlarge the petitioner on bail.
The bail application is allowed and it is directed that accused-Vishesh Sahal S/o Shri Dinesh Prakash Sahal shall be released on bail under Section 439 Cr.P.C. in connection with afore-mentioned FIR registered at concerned Police Station, provided he furnishes a personal bond in the sum of Rs. 1,00,000/- together with two sureties in the sum of Rs. 50,000/- each to the satisfaction of the trial court with the stipulation that he shall comply with all other conditions laid down under Section 437(3) Cr.P.C.
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2023 (1) TMI 1249
Disallowance of business share trading loss - HELD THAT:- As according to the assessee the transaction carried out by the assessee in regard to the share of M/s. SSTL are genuine and bonafide and therefore fully allowable. However, according to assessee, the AO/Ld. CIT(A) has not appreciated the facts in the right perspective and has disallowed the business loss of the assessee while trading in this scrip. It is found that Assessee is a trader in shares which fact has been discerned from the facts discussed - Therefore, the shares traded are his stock-in-trade. And once assessee is found to be a trader, the loss incurred during business need to be allowed as business loss. And therefore the AO is directed to allow the business loss.
Disallowance u/s 14A r.w.r 8D - HELD THAT:- As per assessee disallowance if any, cannot exceed Rs.31,200/- which was earned by the assessee and claimed as exempt. For such a preposition has relied on the decision of Maxopp Investment Ltd. (2018 (3) TMI 805 - SUPREME COURT]. Since the assessee earned exempt income of only Rs 31,200/-, thus find force in the contention of the assessee, so I restrict the disallowance to only Rs.31,200/- and thus the AO is directed to give relief accordingly. Thus, this ground of assessee is partly allowed.
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2023 (1) TMI 1248
TP Adjustment - Manufacturing Segment - Adjustment towards under-utilized capacity - HELD THAT:- As if the assessee has under-utilization capacity during the subject assessment year and it will be factually and legally eligible for an adjustment for the same. However, in the instant case, same is not demonstrated except stating the installed capacity and utilization level. For the aforesaid reasoning, we reject the plea of the assessee as regards the adjustment of under-utilization capacity.
Restriction of adjustment to the value of international transaction - In terms of section 92CA of the I.T.Act, the A.O. can refer the matter to the TPO for computation of ALP in relation to the international transaction and the TPO had empowered compute the ALP only in respect of the international transaction. No adjustment can be made in respect of transaction entered into with non-AEs. Therefore, the action of the TPO to make TP adjustment at entity level instead of restricting it to international transaction is not legally correct.
In the case of CIT v. Phoenix Mecano (India) Pvt. Ltd.[2017 (6) TMI 1240 - BOMBAY HIGH COURT] had held that the determination of ALP ought to be restricted to the transaction with the AEs. The Special Leave Petition preferred by the Revenue [2018 (7) TMI 798 - SC ORDER] against Hon’ble Mumbai High Court judgment was dismissed by the Hon’ble Supreme Court (supra).
The Bangalore Bench of the Tribunal in IKA India (P.) Ltd.[2018 (10) TMI 49 - ITAT BANGALORE] has also held that the transfer pricing adjustment should be only restricted to the AE related transaction of the assessee. The Tribunal in the said case, followed its earlier order in assessee’s own case for assessment year 2012-2013. In the light of the aforesaid reasoning and the judicial pronouncements, cited supra, we direct the TPO to compute the TP adjustment restricting the same to the transaction with the AEs.
Exclusion of certain companies from the comparable list - Exclusion of Smart Card IT Solutions Limited to AO / TPO to apply the test of functionality consistently.
Sark Synertek Limited - We find that the assessee had considered comparables like BLG Electronics, Circuit Systems and Fine Line Circuits Limited, which are also primarily engaged in the business of manufacture of printed circuit boards and the assessee has not objected to these companies to be taken as comparables, as they have low profits. As mentioned earlier, the test of functionality should be applied consistently to all the company by the TPO and assessee. There cannot be cherry picking by both the assessee as well as the TPO. Therefore, we are of the view that the matter needs to be examined afresh by the AO / TPO to apply the test of functionality consistently.
Electronics Corporation of India Limited - The annual report of ECI (Index of Annual Report). The ESI is to be rejected as a comparable on the ground that it is a Government company. In this context, we rely on the order of case of Thyssenkrupp Industries India (P.) Ltd. v. Addl.CIT [2013 (11) TMI 930 - ITAT MUMBAI] Though the assessee had taken this company as a comparable in its TP study, the assessee can raise objections to the comparability of the said company before the TPO or before the appellate forums. In this context, we rely on the judgment of CIT v. Tata Power Solar Systems Limited [2016 (12) TMI 1600 - BOMBAY HIGH COURT] and in the case of DCIT v. Quark Systems Pvt. Ltd. [2009 (10) TMI 591 - ITAT, CHANDIGARH]
Adjustment determined in respect of warranty cost - We find that an identical issue was considered by the Tribunal in assessee’s own case for assessment years 2009-2010, 2010-2011 and also for assessment year 2012-2013. The issue raised in the above ground 3 of the transfer pricing segment was restored to the AO / TPO to examine whether the assessee had recovered expenditure incurred in respect of warranty services with the mark-up of 5%. As in assessee’s own case, which is identical to the facts of the year under consideration, we restore ground 3 (TP segment) to the files of the AO / TPO. It is ordered accordingly.
Disallowance u/s 40(a)(ia) for short deduction of tax - HELD THAT:- The Hon’ble jurisdictional High Court in the case of CIT v. Kishore Rao & Others (HUF) [2016 (4) TMI 430 - KARNATAKA HIGH COURT] had held that short deduction of tax would not attract disallowance u/s 40(a)(ia) of the I.T.Act. The Hon’ble jurisdictional High Court placed reliance on the judgment in the case of CIT v. S.K.Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] - we delete the disallowance.
Disallowance u/s 40(a)(ia) with regard to rebate given to the customers - HELD THAT:- Tribunal in assessee’s own case for assessment year 2010-2011 [2023 (3) TMI 809 - ITAT BANGALORE] had considered an identical issue and restored the same to the files of the A.O. The Tribunal directed the A.O. to consider various clauses of the distribution agreement entered by the assessee with its distributors and to determine whether the payments made is a rebate / discount on a principal to principal basis or whether it is a principal to agent basis. Thus in view of the above order of the Tribunal in assessee’s own case (supra), we restore the issue raised.
Addition of deferred revenue expenses - HELD THAT:- We find an identical issue was considered by the Tribunal in assessee’s own case for assessment year 2010-2011 [2023 (3) TMI 809 - ITAT BANGALORE] on perusal of the sample warranty agreements and following the Co-ordinate Bench order in the case of Schneider Electric IT Business India Pvt. Ltd. v. JCIT, LTU [2019 (4) TMI 1770 - ITAT BANGALOR] deleted the addition on account of deferred revenue expenses - Thus addition deleted.
TDS u/s 194H - Disallowance of claim u/s 40(a)(i) / 40(a)(ia) - rebate given to the customers under stock and sell model - nature of the expenditure and details of the TDS were not provided by the assessee - HELD THAT:- As decided in own case 2010-2011 [2023 (3) TMI 809 - ITAT BANGALORE] lower authorities have to examine whether the year-end provision made on 31st March 2009 is fully reversed on 1st April 2009 and the expenses against which the provision was created is debited to the profit and loss account on payment after deducting TDS. This verification need to be carried out based on the journal entries and ledger copies produced by the assessee for the year under consideration which are submitted now in the form of additional evidence. If the accounting practice of the assessee to reverse the expenses on the 1st day of April of the year under consideration is substantiated by the evidences submitted by the assessee whereby it is demonstrated that there is no doubt allowance expenditure then the assessee would be entitled to claim the amount disallowed in the previous assessment year as otherwise it would amount to double disallowance. We therefore remit the issue back to the AO to verify the ledger and general entries of the assessee for the year under consideration.
Allowability of fixtures and stores interiors expenses - allowable revenue expenditure or not? - HELD THAT:- We find an identical issue was considered by the Tribunal in assessee’s own case for assessment year 2012-2013 as followed the case of M/s.Nike India Private Limited [2022 (7) TMI 1329 - ITAT BANGALORE] after considering the franchisee agreement entered by the assessee with its franchisees held that the expenditure incurred is in the nature of revenue and the same is to be allowed as a deduction - thus we direct the A.O. to allow the said expenditure as a revenue expenditure.
Disallowance of interest on delayed payment of TDS - assessee had paid interest u/s 201(1A) and claimed the same as an allowable expenditure u/s 37 - HELD THAT:- We find on identical facts, the Bangalore Bench of the Tribunal in the case of Velankani Information Systems Ltd. [2018 (10) TMI 68 - ITAT BANGALORE] had decided the issue against the assessee - Thus we hold that the interest on delayed payment of TDS is not an allowable deduction.
Disallowance of unpaid Central Sales Tax (CST) - assessee had not added back unpaid Central Sales Tax (Rajasthan) as per the provisions of section 43B and same was reflected under clause 21(1)(B)(b) to Form No.3CD - HELD THAT:- We find on identical issue the Tribunal in the case of Smt.Husna Parveen [2022 (8) TMI 1219 - ITAT VARANASI] by following the judgment of Chowringhee Sales Bureau (P.) Ltd. [1972 (10) TMI 4 - SUPREME COURT] had decided the issue against the assessee.
Short credit of TDS - AR submitted that despite the directions of the DRP, the A.O. failed to verify the latest Form No.26AS and allow TDS credit - HELD THAT:- The issue raised is restored to the files of the A.O. The A.O. is directed to examine the issue afresh as per the directions of the DRP and grant due tax credit as per law. It is ordered accordingly.
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2023 (1) TMI 1247
Seeking grant of anticipatory bail - petitioner has absented himself willfully despite the undertaking given by his wife and his counsel before the trial Court - HELD THAT:- Issue notice.
Ms. Ashima Gupta, learned counsel assisting Mr. Sanjay Jain, ASG accepts notice for the respondent - List this matter after two weeks.
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