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Showing 201 to 220 of 1386 Records
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2020 (10) TMI 1186 - ITAT PUNE
Addition u/s 68 - addition made by the AO on account of credit balance appearing in the accounts of concerned two creditors having been found to be bogus - alternative recourse to sub-section (1) of section 41 suggested - HELD THAT:- Provisions of section 41(1) can be invoked only when trading liability incurred by the assessee is subsequently found to have seized to exist in the relevant year and the onus in this regard is on the AO to establish on evidence that there was indeed remission or cessation of such liability.
In the present case, this onus was not discharged by the AO and addition on account of balance appearing in the name of concerned two creditors was made by him u/s. 68 of the Act by treating the same as unexplained cash credit because of the failure of assessee to establish mainly the genuineness of said creditors. This position clearly apparent from record, we are of the view that recourse at this stage cannot be made to sub-section (1) of section 41 to confirm the addition made by the AO u/s. 68 as sought by the ld. DR.
Uphold the impugned order of CIT(A) restricting the addition made by the AO u/s. 68 thereby giving a which represented the opening balance and pertained to transactions of earlier year. - Appeal of Revenue dismissed.
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2020 (10) TMI 1185 - ITAT JAIPUR
Validity of reopening of the assessment - information received by the ITO Ward-2, Bharatpur that during the search and seizure operation under section 132(1) - jurisdiction of the AO - development of the Revenue Residency Scheme and allotment of the plots to the members - HELD THAT:- No substance in the objection raised by the assessee regarding validity of reopening of the assessment. As regards the jurisdiction of the AO who issued the notice under section 148, it is not in dispute that the ITO Ward-2 Bharatpur received the information and issued notice under section 148 was having territorial jurisdiction over the assessee. However, only after the assessee filed the return of income revealing her status as Salaried Person, the case of the assessee was transferred to the ITO Ward-3, Bharatpur who was having jurisdiction over the salaried assessees. No error or illegality in the initiation of proceedings under section 148 by ITO Ward-2, Bharatpur.
Non disposal of the objection against the notice under section 148 - Only a reply to notice issued by the AO dated 30.09.2016 and not the objections against the notice issued under section 148 dated 30.03.2016. Even otherwise, this letter was filed by the assessee at the fag end of the assessment proceedings as the assessment order was finally passed on 3rd November, 2016. Therefore, this letter cannot be considered as an objection against the notice issued under section 148 of the Act. Hence in the absence of any objection raised by the assessee, there is no question of disposal of the same by the AO. Accordingly, there is no merit or substance in ground no. 2 of the assessee’s appeal.
Addition on account of On Money paid by the assessee - addition made on the basis of the statement of 3rd party - HELD THAT:- A/R has given an evasive reply that those were not given to the assessee by the society. Thus in the absence of any contrary material, the facts brought on record by the AO which were duly supported and established by the seized material as well as the facts explained by Shri Madan Mohan Gupta in his statement cannot be disputed.
Assessee has not produced any documentary evidence to controvert the seized material and statement of Shri Madan Mohan Gupta. Accordingly, we do not find any error or illegality in the impugned order of the ld. CIT (A) confirming the addition - Decided against assessee.
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2020 (10) TMI 1184 - ITAT CUTTACK
Characterization of income - Capital or revenue receipt - disallowance received by the appellant from Dubai Almn. Company Ltd., towards advance against equity by treating the same as revenue in nature, only on the ground that the appellant has credited the same to P&L account - HELD THAT:- At the time of receipt of money and at the time of written back the amount received from DUBAL, it was revenue receipt and it never took the character of capital receipt as DUBAL took exit from the joint venture agreement before financial closure of the project and DUBAL did not claim or exercise any right or privilege against the assessee company regarding impugned amount.
The impugned amount written back to the statement of profit and loss account of the assessee is the amount funded additionally by DUBAL and same was never converted into equity shares upon occurrence of the financial closure of the project and thus, the impugned amount has been written back to the statement of profit and loss account by the assessee company is a revenue receipt and the liability against the assessee company stood ceased when the amount was written off by DUBAL without any claim in future. No hesitation to hold that the addition made by the AO and confirmed by the ld. CIT(A) is correct and sustainable.
Before we record our final findings and logical conclusion on the issue, we also feel it necessary and appropriate to consider the ratio of decisions relied upon by the assessee.
Section 41(1) of the IT Act particularly deals with the remission of trading liability whereas in that case, waiver of loan amounts to cessation of liability other than trading liability. In the case before us, the amount was written off by DUBAL and same was written back by the assessee to the statement of profit and loss account as an extraordinary item.
In the case of JSW Steel Limited [2017 (4) TMI 47 - ITAT MUMBAI] the issue before the Tribunal was whether the ld. CIT(A) erred in not reducing the net profit being waiver of dues while computing the book profits under section 115JB, wherein, the Tribunal held that the capital surplus on account of waiver of dues neither is taxable nor can be included in computation of book profit u/s. 115JB. This decision has also no application in the case at hand having distinguishable facts and circumstances. - Decided against assessee.
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2020 (10) TMI 1183 - ITAT CUTTACK
Revision u/s 263 - payment of commission to the related and unrelated parties - whether the order of the AO is erroneous and prejudicial to the interest of revenue? - HELD THAT:- Notice alongwith questionnaire was replied by the assessee regarding payment of commission alongwith required confirmations which shows that the commission payment has been made after deducting TDS @ 10% and it is not a case of Pr. CIT that payment of commission has been made by the assessee without making any TDS. This show cause notice and questionnaire issued by the AO and replied filed by the assessee alongwith relevant documents shows that the AO also made enquiry on the issue on payment of commission and TDS thereon and thereafter allowed the claim of the assessee pertaining to payment of commission. Therefore, it cannot be alleged that the AO has not made any enquiry before allowing payment of commission to the related and unrelated parties.
In reply to show cause notice u/s. 263 of the Act, the assessee categorically explained that the assessee earns commission from different companies on procuring order from Government Health Departments & Hospital & Municipal Corporation and the assessee being individual cannot move from one place to another place for enhancement of business.
Different persons received commission against work brought by them and these commission agents against receipt of commission provides services not only to procure orders but also see that proper delivery of goods are made in time and also look after that payments are received from the consignee in time. These facts have not been negated by the ld. Pr. CIT in any manner, thus, we hold that the payment of commission has direct nexus with the services rendered by the recipient of commission and it was paid against their contribution in the enhancement of business of assessee. Thus, it was to be held that the commission has been paid for the business purpose and the AO was right in allowing the same after due verification and examination through proper enquiry.
Introduction of capital - AO show caused the assessee regarding eight amounts including amount i.e. introduction of capital by the assessee and from the copy of bank statements, which shows that the assessee introduced capital by way of transfer through cheques on 27.3.2014 on 15.11.2013, to the firm Gandhi Agencies, which shows that ₹ 15 lakhs was introduced through banking channels. So far as which was introduced in cash is concerned, from the copy of balance sheet of the assessee as on 31.3.2013, it is clear that the assessee has cash in hand more than ₹ 8 lakhs, which was brought forward from financial year 2013-14 and apart from this, the assessee also received gifts from his daughter and mother.
From the copy of saving bank statement, we also notice that the assessee also withdrew ₹ 1 lakh on 31.12.2013 and the amount of cash in hand was amount withdrawn from the bank and amount of gifts is more than ₹ 13 lakhs which self-explained the source of ₹ 13 lakhs introduced in cash to the capital account by the assessee during the relevant period. Therefore, acceptance of explanation of the assessee by the AO in this regard is also justified, proper and reasonable, which cannot be held as erroneous and prejudicial to the interest of the revenue in absence of any other adverse materials brought on record during proceedings u/s. 263 of the Act.
AO had conducted sufficient and adequate enquiry on all three issues and it is not a case of no enquiry or insufficient enquiry. - Decided in favour of assessee.
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2020 (10) TMI 1182 - BOMBAY HIGH COURT
Target Plus Scheme - Direction to the Respondents to issue balance/additional duty credit scrips - star export house - HELD THAT:- It is evident that Petitioner has submitted the no dues certificate as prescribed. The quantum of claim of the Petitioner to the extent of ₹ 4,22,16,175.00 is also admitted by the Zonal Committee, Mumbai. However, according to the customs representative dues relating to non-submission of BRC are pending.
What is required to be submitted is a certificate certifying that no dues are pending against the government including its departments - Without entering into details, we can safely say that the word ‘dues’ means something which is payable. Shorn of semantics, the word ‘dues’ means something which a person has an obligation to pay e.g., a debt or a tax; something which is enforceable. Juxtaposing the word ‘dues’ with the word ‘government’, the expression ‘government dues’ would mean something which is payable to and enforceable by the government on account of a legal obligation or a contract. Therefore, the amount due has to be first quantified by following the due process and as explained by the Supreme Court in the context of the scheme it should be payable to the government and subsisting i.e., not paid.
The Target Plus Scheme is a beneficial provision with the objective to accelerate growth in exports by giving incentives to those export houses whose exports show an annual upward trend. Initially the benefits were graded i.e., 5%, 10% and 15% depending upon the percentage of incremental growth in exports. Petitioner fell within the 15% category for the year 2005-2006. Thereafter, by an amendment on 12.06.2006, the percentage of incentives was made uniform i.e., 5% which was given retrospective effect from 01.04.2005 - Petitioner is entitled to the balance 10% benefit for the same period for which the 5% benefit was granted being within the 15% category. When one part of the benefit for a year was given, question of withholding of the remaining benefit for the same year does not arise. Exports are of the year 2005-2006. We are now in 2020. 14 years have lapsed in between. Such inordinate delay can only frustrate the very objective of the scheme.
Respondents are directed to issue the necessary licence to the Petitioner for the balance/additional benefit of duty credit scrips for the amount of ₹ 4,22,16,175.00 for the year 2005-2006 under the Target Plus Scheme within a period of four weeks from the date of receipt of a copy of this judgment - Petition allowed.
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2020 (10) TMI 1181 - ALLAHABAD HIGH COURT
Grant of Bail - Oppression and Mismanagement - appointment of Applicant as Director on the basis of forged director - It is alleged that Ex-Director without discussion with other Directors prepared forged documents and ousted his wife from the Directorship - HELD THAT:- This court finds that the dispute relates to the mismanagement of the affairs of the Pvt. Ltd. Company but the FIR has been lodged under provisions of IPC and procedure under Cr.P.C has been adopted in prosecution of applicant. The Companies Act, 2013 is a complete code which provides for the procedure of conduct investigation into the affairs of the company where allegations of fraud are made against the office bearers of the company. The allegations regarding the offences committed by the applicant should have been investigated under the provisions of companies act aforesaid.
Code of Criminal Procedure, 1973 is a code by itself as far as procedure for arrest, investigation and prosecution of the offence under Companies Act is concerned. The procedure provided under the Companies Act does not excludes the application of Cr.P.C completely. Section 212(6) excludes the applicability of Cr.P.C only for the limited purpose for treating the offence under Section 447 cognizable. Section 438 of the Companies Act makes it clear Section 212(14) of the Companies Act provides that the central government has to provide whether prosecution should be launched against " the companies and its officer or employees, who are or have been in employment in the company or any other person directly or indirectly connected with the affairs of the company." Therefore it appears that when the director of company is prosecuted the company should also be arrayed as an accused. Even if the argument of the learned counsel for the informant is accepted that the applicant was illegally inducted in the company as director by fabrication of resolution, even then the prosecution under Section aforesaid can be launched against the applicant under the provisions of Companies Act since Section 212 (4) Cr.P.C clearly provides "prosecution of any other persons directly or indirectly connected with the affairs of the company".
In the present case the entire investigation has been conducted by the Investigating Officer of the police and not by the Special Fraud Investigating Officer appointed under the Companies Act. First proviso to Section 212(6)(ii) provides that no person accused of any offence under Section 447 of the Companies Act shall be released on bail. The only exception is a person who is under age of 16 years or a woman or a sick or infirm person. The applicant in this case is a woman whose prayer for bail can also be considered under Section 437(1) Cr.P.C. In the present case there is no approval from the central government for Investigating Officer to investigate the offence alleged against the applicant under Section 212 of the Companies Act, 2013. Regarding criminal history of the applicant is appears that all the case have been lodged by or at the behest of her fellow directors who are part of the same company.
The Court is of the view that the applicant has made out a case for bail - bail application is allowed.
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2020 (10) TMI 1180 - GUJARAT HIGH COURT
Rearrangement of Shareholding - Demand of sums towards transfer fee - non-utility penalty in respect of plots owned by the petitioner - whether by change of name from TAGROS Chemicals India Limited to TAGROS Chemicals India Private Limited would tantamount to change of name in the company and therefore invite levying of transfer charges? - HELD THAT:- What has been done is rearrangement of shareholding within the family without there being a change in the total shareholding of the company. No new separate legal entity has been created - keeping in mind the provisions of Section 23(3) of the Companies Act and Section 14 thereof, what has really happened is that the change in the name of the company is only by adding the word 'private'. As per Section 13(2) of the Companies Act, any change in the name of the company shall be subject to the provisions of sub sections (2) and (3) of section 4 of the Act and shall not come into effect except with the approval of the Central Government in writing. The proviso to the said section says that no such approval will be necessary when the only change in the name of the company is deletion therefrom or addition thereto of the word 'private' consequent on the conversion of any one class of the company to another class in accordance with the provisions of the Act. Thus, any change that is brought about in the name of a company by either deletion or addition of the word 'private' would not require written approval.
What appears to be the legal position from reading the aforesaid sections is that mere change in the name of company from public to private would not tantamount to a change in the constitution of the company since this is brought out only with a view for the purpose of complying with the requirements viz-a-viz the government under the Companies Act. There is no change in the constitution thereof. Accordingly, the stand of the corporation for levying of transfer fees is bad.
Non utility charges or penalty for non utilisation of plots - HELD THAT:- It is evident from reading the notification of the Ministry of Environment and Forests dated 25.08.2009 that the Government of India enforced a moratorium on construction due to the absence of environmental clearance. The moratorium was lifted only after 7 years by a memorandum dated 25.11.2016. No environmental clearance could be obtained and no permission for construction could be granted during this period and as a result of facts beyond the control of the petitioner, the plots remained unutilised. Therefore even the recovery of penalty and non utilisation charges are without authority of law. Merely because in one of the petitions, the petitioner has paid such charges which otherwise he was not obliged to pay in view of the moratorium, that itself would not result in ousting the petitioner from the merits of that petition.
The action of the respondent Corporation in demanding transfer fee and non utility penalty in respect of the plots is held to be illegal and contrary to law - Petition allowed.
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2020 (10) TMI 1179 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI
Approval of the Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT:- Upon considering the approval accorded by the members and creditors of all the petitioner companies to the proposed scheme, as well as no objections filed by the regional director, northern region, the official liquidator, and the income tax department and being satisfied in view of affidavit of undertaking filed by the transferee company, there appears to be no impediment in sanctioning the present scheme. Consequently, sanction is hereby granted to the scheme under section 230 & 232 of the companies act, 2013. The petitioner however remain bound to comply with the statutory requirements in accordance with law.
As a sequel, sanction is hereby granted to the scheme under section 230 & 232 of the Companies Act, 2013. The petitioner however remain bound to comply with the statutory requirements in accordance with law - Application allowed.
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2020 (10) TMI 1178 - NATIONAL COMPANY LAW TRIBUNAL , DELHI BENCH
Restoration of name of the Company in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT:- The Appellant has submitted sufficient evidence that it has been in operation during the period preceding strike off, therefore it could not be termed as a defunct company as per section 252 of the Act. Thus, taking into consideration the provisions of Section 252(1) of the Companies Act, 2013, which vests this Tribunal with a discretion where the Company, whose name has been struck off, and such Company is able to demonstrate that it is just to do so, can restore the name of the Company, in the Register and in the interest of all stakeholders, including the Appellant itself, who seeks restoration of the name of the Company in the register maintained by Registrar of Companies, the company deserve to be restored.
Appeal allowed.
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2020 (10) TMI 1177 - SUPREME COURT
CIRP proceedings against the personal guarantors to corporate debtors - Transfer of the Writ Petitions filed before High Courts to this Court - vires of Section 95, 96, 99, 100, 101 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Writ Petitions that are pending in the High Courts pertaining to the challenge to the Notification dated 15.11.2019 and related issues have to be transferred to this Court. Transfer of the Writ Petitions to this Court would avoid conflicting decisions by the High Courts which are in seisin of the Writ Petitions. The Insolvency and Bankruptcy Code is at a nascent stage and it is better that the interpretation of the provisions of the Code is taken up by this Court to avoid any confusion, and to authoritatively settle the law. Considering the importance of the issues raised in the Writ Petitions which need finality of judicial determination at the earliest, it is just and proper that the Writ Petitions are transferred from the High Courts to this Court.
The Writ Petitions are giving rise to the above Transfer Petitions which are pending before the High Courts to this Court. The Registries of the High Courts are directed to transmit the records of the Writ Petitions forthwith.
Petition allowed.
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2020 (10) TMI 1176 - KERALA HIGH COURT
Land acquisition - Whether the finding of the learned single Judge that the agreement executed by and between the writ petitioners and the District Collector could be treated as an award in terms of Act, 2013? - HELD THAT:- The determination was done in terms of the provisions of the Act, 2013 and it also takes in acquisition of land on the basis of agreement. Thus, the condition contained under the agreements granting liberty to the writ petitioners to make claims on account of the act 2013 cannot be said to be a totally strange or alien condition. To put it otherwise, the said condition makes absolute sense, since it really intended to protect the interest of the land owners which has a clear correlation with the objective of Act, 2013 for payment of adequate and fair compensation, apart from other provisions for rehabilitation and resettlement, for ensuring that the cumulative outcome of compulsory acquisition should be that, affected persons become partners in the developmental activities. Having acted upon the unilateral agreement executed by the writ petitioners in favour of the District Collector and paid the compensation in terms of that agreement and secured possession of the land accordingly, the District Collector cannot turn around and attack the agreement stating that the District Collector is not bound by unilateral agreement executed by the writ petitioners. Admittedly, it is an essential condition of the agreement that while re-determining the value of the land surrendered by the writ petitioners under the provisions of the Act, 2013 and the Rules framed thereunder, the petitioners are entitled to get further compensation or package offered by the Government over and above the compensation already fixed and further that they would be eligible to receive the same. If there was no intention to act upon that part of the agreement, the District Collector should not have accepted the agreement in toto.
Having not done so, the District Collector is not at liberty to resile from the said essential term of the agreements. Above all, the requisitioning authority is the Corporation of Kochi and at the end of the day further compensation if any to be paid, the financial sufferer is the said Corporation and accordingly, looking from that angle, the appellants cannot be strictly termed as aggrieved persons.
Yet another contention advanced by the learned Senior Government Pleader, Sri. Tek Chand, is that in terms of Annexure A3 judgment produced along with the writ appeal, the writ petitioners are not at liberty to make any claims in terms of the determination of compensation as per Act, 2013, since no income tax was deducted consequent to the purchase of the land by the Government in terms of the agreement offered by the writ petitioners. However, the said issue is guided by Section 96 of the Act, 2013 dealing with exemption from income tax, stamp duty and fees, which stipulates that no income tax or stamp duty shall be levied on any award or agreement made under this Act, except under Section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same. Therefore, it is unequivocal that by virtue of the specific stipulation contained under section 96 of Act 2013, no income tax can be levied on any award or agreement. Which means, the appellants are not entitled to get any advantage on the basis of Annexure A3 judgment. Said so, we do not find any force in the said contention also.
The appellant have not made out any case, justifying interference in the judgment of the learned single Judge exercising the power under Section 5 of the Kerala High Court Act, there being no error in exercising the discretion conferred under Article 226 of the Constitution of India, or other legal infirmities - Appeal dismissed.
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2020 (10) TMI 1175 - KARNATAKA HIGH COURT
Dishonor of Cheque - insufficiency of funds - offence punishable under Section 138 of the Negotiable Instruments Act - Whether the impugned order of conviction and sentence passed by the trial Court and confirmed by the First Appellate Court against the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act suffer any illegality, impropriety or incorrectness?
HELD THAT:- There cannot be any dispute that once the issuance of the cheque and signature of the accused on the cheque are admitted, the presumption under Section 139 of the Negotiable Instruments Act that the cheque was issued towards discharge of legally recoverable debt arises. Then the burden shifts to the accused to rebut the said presumption by acceptable evidence.
The accused/DW.1 in his cross-examination has uneqivocally admitted that the notice - Ex.P3 was served on him. If Shivanna and the complainant colluded with each other to commit fraud on the accused and presented the cheque which contains huge amount, in the ordinary course at the first instance the accused should have replied Ex.P3 denying the contents or his liability. Thereby, there was a deemed admission of the contents of the notice. That circumstance went against the accused - Either by way of reply to the notice or in the cross-examination of PW.1, there was no denial of lending capacity of the complainant. Even in the evidence of the accused, there was no denial of the lending capacity. Therefore, the contention of the learned counsel for the petitioner regarding the lending capacity is apparently untenable.
Considering the material on record and the judgment of the Hon'ble Supreme Court in RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT] regarding the presumption under Section 139 of the Negotiable Instruments Act, the Trial Court rightly rejected the defence of the accused and convicted him.
Revision dismissed.
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2020 (10) TMI 1174 - KERALA HIGH COURT
Effective date of registration certificate - conversion of the provisional registration to a permanent registration - HELD THAT:- The procedure that had to be followed by the petitioner for obtaining a registration under the GST, in circumstances where he was already a registered dealer under the erstwhile KVAT Act, is the one prescribed in Rule 24 of the GST Rules. It is not in dispute that the petitioner applied for a registration in accordance with Rule 24 and was in fact granted a provisional registration as evident from Ext.P1 certificate dated 28.06.2017. It is also significant to note that thereafter, the provisional registration granted to the petitioner was not formally cancelled by the respondents by following the procedure envisaged under the Act for cancellation of the provisional registration. Under such circumstances, the petitioner continued to function under the provisional registration granted to him, although the absence of a permanent registration resulted in a situation where he could not upload the returns and other documents enabling him to claim input tax credit in respect of the tax paid stock of material that was available with him.
When the provisional registration granted to the petitioner was not cancelled through the procedure contemplated under the Act and Rules, and the respondents had granted a regular registration on 04.01.2020, the permanent registration must relate back to the date of the provisional registration and the petitioner ought to be entitled to upload the returns for the past period between the date of Exts.P1 and P3 and to avail eligible input tax credit based on the returns uploaded by him. This is more so because it is admittedly the case that there was no formal order canceling the provisional registration, that was communicated to the petitioner in terms of the Act and Rules.
The respondents are directed to amend the Registration Certificate issued to the petitioner so as to make it valid from 01.07.2017, and the petitioner is permitted to upload the returns for the period covered by Exts. P5, P6 and P7 statements, and to pay tax as well as claim input tax credit based on the returns so uploaded - petition allowed.
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2020 (10) TMI 1173 - BOMBAY HIGH COURT
Interest on late payment of GST - Calculation of Interest - whether the interest could be demanded only on the net liability and not on gross liability? - HELD THAT:- Amendment to section 50 of the Central Goods and Service Tax Act, 2017 was introduced by Finance (No.2) Act, 2019 for charging interest on the net cash tax liability. The said amendment was made effective prospectively from 01.09.2020 vide the Central Government notification No.63/2020-Central Tax dated 25.08.2020. GST Council in its 39th meeting recommended that interest should be charged on the net cash tax liability with effect from 01.07.2017. Recommendation was made for making the amendment to section 50 retrospectively with effect from 01.07.2017. It is stated that retrospective amendment in the GST laws would be carried out in the due course through suitable legislation. After issuance of the notification dated 25.08.2020, views were expressed by tax payers that the said notification is contrary to the recommendation of GST Council to charge interest on the net cash tax liability with effect from 01.07.2017.
The central issue raised in the writ petition i.e., whether interest under section 50 of the Central Goods and Service Tax Act, 2017 is to be levied on the gross tax liability or on the next tax liability has been answered by the Board in the administrative instructions dated 18.09.2020 by categorically stating that the interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020.
Respondents to intimate the petitioner about the quantum of interest payable on account of delayed payment of GST for the period under consideration in terms of the administrative instructions dated 18.09.2020 and the same shall be paid by the petitioner, if not already paid - Petition allowed.
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2020 (10) TMI 1172 - JHARKHAND HIGH COURT
Jurisdiction - Time Limitation for availment of Input Tax Credit - HELD THAT:- The instant matter does not fall within the subject matter assigned to this Bench. Therefore, let the matter be listed before the appropriate Division Bench, as per the present distribution of roster.
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2020 (10) TMI 1171 - BOMBAY HIGH COURT
Validity of reopening of assessment u/s 147 - AO refusal to furnish of reasons for issuing notice under Section 148 - HELD THAT:- In GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT] has held that when a notice under Section 148 of the IT Act is issued, the proper course of action for the noticee is to file return and if he desires to seek reasons for issuing notice, the AO is bound to furnish reasons within a reasonable time - On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the AO is bound to dispose of the same by passing a speaking order.
Considering the law laid down by the Hon'ble Supreme Court, it was really not open to the AO to refuse furnish of reasons for issuing notice under Section 148 of the IT Act. As a result of such refusal, the Appellant was deprived of the valuable opportunity of filing objections to the reopening of the assessment. The approach of the AO in this case was contrary to the law laid down by the Hon'ble Apex Court in GKN Driveshafts (India) Ltd. [supra] - Decided in favour of the Assessee
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2020 (10) TMI 1170 - KARNATAKA HIGH COURT
TP Adjustment - comparable selection - Tribunal adopting turnover filter of ₹ 200 crore - Tribunal holding that KALS Information Systems Ltd., Accel Transmatic Ltd., Tata Elxsi Limited and Lucid Software Ltd., cannot be taken as comparables on the basis of facts of different case for different assessee for different assessment year and directing the TPO to apply RPT filter of 15% - HELD THAT:- As assessee submits that the competent authority of USA and India have reached mutual agreement and on the basis of the aforesaid agreement, the AO has passed an Order giving effect to mutual agreement procedure vide order dated 15.12.2015. It is also pointed out that in view of the order passed by the Assessing Officer dated 15.12.2015, the substantial questions of law involved in this appeal have been rendered academic.
As revenue submits that the appeal may be disposed of with liberty to the revenue to revive the same, if occasion so arises. Appeal is disposed of with liberty as prayed for.
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2020 (10) TMI 1169 - KARNATAKA HIGH COURT
Correct head of income - gains arising on cashless exercise of stock options - taxable as income under the heads 'income from salaries' and 'short term capital gains' or 'long term capital gains' as claimed by the Appellant - Whether stock options did not constitute a 'capital asset' under Section 2(14) of the Act? - cashless exercise of stock options constitute transfer of a long term capital asset under Section 2(47) or not? - HELD THAT:- Assessee was an independent consultant to SiRF USA and was not an employee of SiRF USA at the relevant time. Thus, there was no relationship of employer and employee between the SiRF USA and the assessee and therefore, the finding recorded by the tribunal that the income from the exercise of stock option has to be treated as income from salaries is perverse as it is trite law that unless the relationship of employer and employee exists, the income cannot be treated as salary. [See: CIT VS. L.W.RUSSEL [1964 (4) TMI 4 - SUPREME COURT]
Revenue in case of several other assessee's have accepted the fact that on cashless exercise of option, there arises a income in the nature of capital gains. However, in the case of the assessee the aforesaid stand was not taken. It is also pertinent to mention here that nothing was brought to our notice that the view taken by the tribunal in the following cases has been challenged by the revenue. See SHRI KAMLESH BAHEDIA C/O ABOBE SYSTEM INDIA PVT. LTD [2014 (8) TMI 843 - ITAT DELHI], N.R. RAVIKRISHNAN [2018 (12) TMI 1255 - ITAT BANGALORE] and DR. MUTHIAN SIVATHANU [2018 (11) TMI 1112 - ITAT CHENNAI]
Thus in view of law laid down by the Supreme Court in Berger paints [2004 (2) TMI 4 - SUPREME COURT] it was not open for the revenue to take one stand in case of the assessee and to challenge the correctness of the same in case of other assessee. For this reason also, the revenue cannot be permitted to take a different view in this appeal. - Decided in favour of assessee.
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2020 (10) TMI 1168 - KARNATAKA HIGH COURT
Disallowance u/s 14A r.w.r. 8D - Non recording of satisfaction by AO - HELD THAT:- Assessing Officer has not rendered any finding with regard to incorrectness of the claim of the assessee either with regard to its accounts or with regard to the fact that he is not satisfied with the claim of the assessee in respect of such expenditure in relation to exempt income as is required in accordance with Section 14A(2) of the Act for making a disallowance under Rule 8D. Thus, from perusal of the relevant extract of the order passed by the Assessing Officer, the tribunal has rightly concluded that the Assessing Officer has not recorded the satisfaction with regard to the claim of the assessee for disallowance under Section 14A read with Rule 8D(2) - Decided in favour of assessee.
Disallowance under Rule 8D(2)(II) while making the disallowance under Section 14A - whether interest expenses incurred cannot be directly attributed to any particular income or receipt, provision of rule 8D(2)(ii) automatically becomes applicable? - HELD THAT:- In The 'CIT VS. RELIANCE UTILITIES AND POWER LTD.', [2009 (1) TMI 4 - BOMBAY HIGH COURT] has held that where interest free funds exceed the value of investments, it can safely be inferred that investments have been made out of interest free funds and no disallowance under Section 14A towards any interest expenditure can be made. Similar view was taken in CIT VS. HDFC BANK LTD., [2014 (8) TMI 119 - BOMBAY HIGH COURT]
On perusal of the balance sheet the finding has been recorded that assessee has received an amount of ₹ 146.52 Crores as advances from customers, which are interest free and the reserves and surpluses are to the tune of ₹ 882,67 Crores. Thus, it has been held that all the aforesaid amounts are interest free funds and are sufficient to make tax free investments and therefore, the finding of the Assessing Officer that overdraft facility was directly used for making tax exempt investments have been reversed. The tribunal has affirmed the aforesaid finding. Thus, concurrent findings of fact have been recorded on the aforesaid issue, which could not be demonstrated to be perverse. Therefore, no interference is called with the aforesaid concurrent findings of fact in this appeal under Section 260A - Decided in favour of assessee.
Disallowance u/s 36(1)(iii) - tribunal deleted addition holding that the advances to its subsidiaries were in the normal course of business, for business purposes - whether the funds from the overdraft account were utilized to make interest - free advances for acquiring lands, property advances? - HELD THAT:- The assessee had to pay advances to the land owner for the purposes of entering into Joint Development Agreement for development of real estate projects, therefore, the advances are business advances and cannot be treated as non business or capital advances. The tribunal has held that reserves and surplus earned by assessee company is approximately to the extent of ₹ 994.92 Crores as against total advances and deposits of ₹ 248.24 Crores. Thus, the tribunal has found that the assessee's own fund are far in excess of advances and deposits made during the year and has held that CIT (Appeals) has rightly deleted the disallowance of interest. The aforesaid concurrent findings of fact are based on meticulous appreciation of evidence on record and by no stretch of imagination can be said to be perverse. - Decided in favour of assessee.
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2020 (10) TMI 1167 - KARNATAKA HIGH COURT
Income recognition - 'unearned income' - scrutiny under Computer Aided Scrutiny Selection (CASS) - Change of accounting method - Accounting Standard - 9 Applicability - as per AO assessee to be an insurance company by treating it as outside the purview of Accounting Standard - 9 - HELD THAT:- Assessee in the instant case has changed invoice method to proportionate completion method. Till 31.03.2007, the assessee used to recognize revenue immediately on raising of invoice, even though, the service under the contract is not completed or substantially completed. The assessee is involved in execution of more than one act i.e., rendering service in the entire year, therefore, it adopted the proportionate completion method. The revenue from service transactions usually recognized as the service is performed either by proportionate completion method or completed service contract method. The assessee is therefore, rightly adopted proportionate completion method as it is engaged in rendering service in the entire year. The assessee in the instant case is covered by Accounting Standard - 9 as it does not deal with revenue of insurance companies arising from insurance contracts.
It is open for the assessee to change the method of accounting and the burden is on the department to prove that the method invoked is not correct and that such a method distorts the profits of a particular year. The aforesaid burden has not been discharged by the revenue in the instant case. Besides that, the revenue has accepted the change in the method of accounting in subsequent Assessment Years viz., 2010-11, 2011-12 and 2012-13, therefore, there is no justification on the part of the Assessing Officer to change the method adopted by the assessee and to determine the income on estimate basis. - Decided in favour of assessee.
Entitlement to follow accounting standard 9 for revenue recognition in respect of TPA fee received from insurance companies - As held that business of a third party agent is insurance business as third party agent makes payments to the hospital / individuals policy holders, therefore, Accounting Standard - 9 is not applicable in the fact situation of the case - HELD THAT:- Regulation 3 prescribes the health services, which may be provided by a third party agent to an insurer under the agreement in connection with health insurance business. Section 2(9) of the Insurance Act defines the expression 'insurer' which includes insurance company. Thus, it is evident that the third party agent and the insurance company are different entities. Therefore, the finding recorded by the tribunal that the assessee's business activities do not fall under the business of insurance company is correct. - Decided in favour of assessee.
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