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Showing 201 to 220 of 2121 Records
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2019 (2) TMI 1929
Principles of natural justice - levy of GST as well as penalty - grievances of the writ petitioner is that he has not received any show- cause notice or an opportunity was provided, enabling him to defend his case - HELD THAT:- This Court is of an opinion that the writ petition is fit for remand and accordingly, the impugned order passed by the second respondent in memo dated 22.10.2018 is quashed. The respondents are directed to issue show cause notice, setting out all the details to the writ petitioner, within a period of four weeks from the date of receipt of a copy of this order. On receipt of the show cause notice from the respondents, the writ petitioner is directed to submit their explanations/objections, along with the documents, if any, within a period of two weeks from the date of receipt of the show cause notice and thereafter, the authorities competent shall consider the materials available on record as well as the explanations/objections submitted by the writ petitioner, take a decision and pass orders on merits and in accordance with law, within a period of eight weeks thereafter.
Petition allowed in part.
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2019 (2) TMI 1928
Levy of penalty u/s 78 of FA - case of appellant is that instead of adjusting the amount of tax paid earlier with the fresh calculation of tax which paid on fresh deposit they have mistakenly cross receipts with the earlier cross receipts resulting into some differential tax label due to changing of tax - no suppression of facts or evasion of tax - HELD THAT:- There is only venial breach of the provision of Rule 6 (3) of Service Tax Rules, and there is no mis-statement/suppression of facts on the part of the appellant. Further, it is found that they have deposited service tax regularly and filed returns in the ordinary course of business. The differential tax have arisen due to lack of understanding of the rules and law.
The penalty under Section 78 of the Act is seta side - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 1927
Territorial Jurisdiction - power of High Court to entertain the Special Civil Application filed by the Appellant herein which was entertained and allowed by the Single Judge - whether the Division Bench was justified in holding that the SCA filed by the Appellant was not maintainable for want of territorial jurisdiction of the Gujarat High Court? - HELD THAT:- The Division Bench erred in not noticing Article 226(2) of the Constitution of India while deciding the question arising in this case.
The question as to whether the Gujarat High Court has territorial jurisdiction to entertain the Appellant's petition (SCA) or not, should have been decided keeping in view the provisions of Article 226(2) of the Constitution read with Section 20 of the Code of Civil Procedure, 1908.
In the present case, it is found from the averments of the petition (SCA) that firstly, Respondent No. 1-Company has its factory at Porbandar, which is a part of State of Gujarat; Second, the Labour Court, Junagadh, which is also a part of State of Gujarat, entertained the dispute between the Appellant-Union and Respondent No. 1-Company and passed a recovery order; and Third, one of the reliefs claimed in the petition (SCA) pertains to non-payment of outstanding wages payable to the workers by Respondent No. 1-Company - thus, the part of the cause of action as contemplated in Article 226(2) of the Constitution has arisen within the territorial jurisdiction of the Gujarat High Court for filing the petition (SCA) to claim appropriate reliefs in relation to such dispute against Respondent No. 1-Company.
The Appellant's petition (SCA) was maintainable in the Gujarat High Court inasmuch as the part of the cause of action to file such petition did accrue to the Appellant herein (Petitioner) within the territorial jurisdiction of the Gujarat High Court - the SCA was required to be decided on merits by the Gujarat High Court - Appeal allowed.
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2019 (2) TMI 1926
Demand u/s 201(1) and u/s 201(1A) - defects in Form No.15G and 15H - Powers of the Commissioner (Appeals) - CIT-A remitting back the issue to the AO with the direction to give a final opportunity to the assessee to produce form 15G /15H collected before the due date from the deductees and give credit to the same - HELD THAT:- . As per section 251(1)(c) of the Act, the CIT(A) may pass such order as he thinks fit. In other words, he can confirm, reduce, enhance, annul or remit the issue back to the file of A.O. for fresh consideration. Since the impugned order under which the assessee is in appeal is not an assessment order or penalty order, the provisions empowers the CIT(A) to pass an order as he thinks fit. Therefore, the CIT(A) did not travel beyond the scope of section 251(1)(c) of the I.T. Act. Hence, we do not find any infirmity in the orders of the CIT(A) with regard to remitting the issue to the file of A.O. to give an opportunity to the assessee to produce Form No.15G / 15H collected before the due date from the deductees and grant due credit for the same.
Whether CIT(A) was correct in directing the Assessing Officer to grant an opportunity to the assessee to furnish the correct PAN No’s of the deductees? - CIT(A) correctly directed the Assessing Officer to re-compute the tax u/s. 201 of I.T. Act at the rate of 10% for those deductees, where the assessee furnished the PAN Nos. This direction of the CIT(A) is in the interest of justice and equity. Further, we make it clear that the assessee has to produce correct Permanent Account Number (PAN) of the deductee, so as to get corresponding credit. With these observations, the appeals of the Revenue are dismissed.
Jurisdiction of the Assessing Officer to pass an order u/s 201 and 201(1A) - assessee is treated as an ‘assessee in default’ - assessee contented that there should be proceedings against the deductee/payee and the finding to be rendered by the revenue that the taxes are not recoverable from the deductees and only in such an eventuality, the assessee can be declared as an ‘assessee in default’ - HELD THAT:- Section 201 has been amended with effect from 01.07.2012 whereby the burden of proving that the payee / deductee had paid the taxes is on the assessee / deductor. In other words, the assessee is to provide proof that payee / deductee has filed the return declaring the income on which the TDS ought to have been deducted and duly paid the taxes on the same. The relevant amendment in section 201 introduced by the Finance Act, 2012 with effect from 01.07.2012.
In view of the above amendment, the burden is cast on the assessee to prove that the deductee / payee had duly paid the taxes on the income which ought to have been subjected to TDS by the assessee-deductor. In the instant cases, the relevant assessment years are 2013-2014 to 2016-2017, and the amended provision has application. Therefore, this ground raised by the assessee is rejected.
TDS u/s 194A - Liability on the correct person who is responsible for the deduction of tax at source - so many managers who is actually responsible for the actual payment in firm - HELD THAT:- In the instant case, the liability to pay taxes as per section 201 of the Act has been fastened on the assessee’s firm and the managing partner, as its representative. For proceedings u/s. 201 of the Act, the liability to pay taxes is on the assessee who had failed to deduct tax at source. It has been correctly done so in the instant case. Therefore, this ground raised by the assessee is also rejected. It is ordered accordingly.
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2019 (2) TMI 1925
Maintainability of appeal - Low tax effect - HELD THAT:- This Appeal under Section 260A of the Income Tax Act, 1961 has been filed challenging the order passed by the Income Tax Appellate Tribunal.
The learned counsel appearing in support of the appeal, states that he has been instructed to withdraw this appeal. This is for the reason that the tax effect involved in this appeal is less than the threshold limit of ₹ 50 Lacs as provided in CBDT Circular No. 3 of 2018 dated 11.7.2018. In view of the above submission, the appeal is dismissed as not pressed.
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2019 (2) TMI 1924
Addition on account of accommodation entry - information received from the Director General of Income Tax (Investigation), Mumbai intimating that the assessee company is one of the beneficiaries in the accommodation entry operation carried out by Shri Praveen Jain in Mumbai - HELD THAT:- Assessee is engaged in the construction of multi storage building. In the usual course of business, the assessee was receiving the advances for flats. The advance from M/s. Josh Trading Co. Pvt. Ltd. was also received in the usual course. The assessee has given the address, PAN number and confirmation of the parties. The advance was received through banking channel - when the deal did not materialize, the advance was returned also by banking channel. All these facts are not disputed by the Revenue.
A.O. has not made any enquiry himself to rebut the submission of the assessee. It is not the case that the address given by M/s. Josh Trading Co. Pvt. Ltd. is bogus or that the A.O. has made an enquiry and the said M/s. Josh Trading Co. Pvt. Ltd. has not responded. In these circumstances, in our considered opinion, the assessee has discharged the onus cast upon him. The A.O. has not brought on record any cogent material for the proposition that the advance received was bogus. It is settled law that the addition based upon surmise and conjecture de hors any enquiry whatsoever is not sustainable. Hence, in our considered opinion, there is no infirmity in the order of the ld. CIT(A). Accordingly, we uphold the same.
Addition on account of long term capital gain - CIT(A) deleted the addition - HELD THAT:- The assessee had sold Tenement situated at Mumbai to the purchaser and also right of piece or parcel of tit-bit plot adjacent to the said tenement to the same purchaser. The tenement and the land were sold through two agreements. This was because there were some disputes with the purchaser. The agreement of the lease deed shows that as per the terms of the lease agreement, the lease tit-bit land is to be held by the leaseee only along with the tenement and not separately. In the case of transfer of tenement, the tit-bit area will automatically get transferred. The above makes it abundantly clear that the tit-bit land was to be sold along with the tenement and it was only due to some dispute that the agreement for the tit-bit land was entered later on. The A.O. has found difference in the stamp valuation of the tit-bit land at the time of registration.
The assessee has received the entire consideration in July 2011. The stamp valuation of tit bit land as on 31.03.2012 was ₹ 1,49,44,020/-. Hence, if both the agreements are considered in cohesive manner, it will be found that the total stamp duty valuation comes to ₹ 1,37,37,500/- and ₹ 1,49,44,020/- as compared to the sale consideration received by the assessee totaling to ₹ 2,20,000/- + ₹ 80,000/-. If this is considered, the sale value received is higher than the combined stamp duty value of the property. On this account, the ld. CIT(A) is correct in deciding the issue in favour of the assessee.
Applicability of section 50C - A.O. has invoked the provision of section 50C in the context of tit-bit leasehold land. It is admitted that it is a lease hold land and it has been held by the ITAT, Mumbai Bench in the case of Atul G Puranik [2011 (5) TMI 576 - ITAT, MUMBAI] that section 50C cannot be invoked on transfer of lease hold rights. Since there is no dispute that the impugned tit bit land was under lease, this decision fully applies and the application of section 50C in this case by the A.O. is not justified.
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2019 (2) TMI 1923
Addition u/s 68 - Appellant Company had not discharged its onus with respect to justification of credit received as share application/ share premium money - HELD THAT:- In this case, the share application money along with premium was received through banking channel . The details of the bank account of the investor have been duly supplied. Even the source of funds of the Investor is also explained. The income tax returns of the investor are also furnished. The investor companies have been duly registered under the Indian Companies Act and there is no evidence on file that their registration has been cancel led or that the investor companies have been declared as nonexistent or shell companies. In response to summons issued by the DDIT (Inv) , Kolkata, investor companies duly filed al l the details and duly confirmed that they had invested in the shares of the assessee company.
The only reason for which the aforesaid investment has been disbelieved by the Assessing Officer is on the ground that the Inspector of the Income tax at Kolkata had reported that the aforesaid companies could not be traced out at the given address - we find from the record that the assessee company has furnished the bank details of the investor companies. The address on the existence of the said companies could have been verified from the account opening forms etc. it is in the common knowledge that the accounts are opened in the bank through introducers who approve that the account holder is known to him / her and is genuine. Enquiries could have been made from the said introducers also.
There is voluminous record placed on the file such as share application forms, share certificates, bank accounts statements, confirmation from the investors, certificate of incorporation of the said companies, directors report , auditors report and balance sheets etc. So far as the question as to why the said investment company would investigate the assessee company, that in our view, is the internal / market decision of the said investor company and that cannot be a basis for holding that the said investor is bogus. So far as the observation that the investor companies were running into losses, the Ld. Counsel for the assessee in this respect has demonstrated from the balance sheet , that as on the date of investment, the said companies were having huge surpluses, which were sufficient to make the aforesaid investment. Under the circumstances, the sole report of the Inspector that he could not trace the companies, which has been submit ted in the back of the assessee without any opportunity to the assessee to confront the same, is not sufficient to hold that the aforesaid transactions were bogus. Moreover , there is no evidence on the file that the amounts invested by the aforesaid companies was the own money of the assessee. - Decided in favour of assessee.
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2019 (2) TMI 1922
Default for payment of Central Excise duty - payment of Central Excise duty made on goods cleared on consignment to consignment basis only in cash, without making use of the credit accumulated in cenvat credit account - vires of Rules 8 (3) & 8 (3A) of the Central Excise Rules, 2002 - October, 2013 to January, 2014 - HELD THAT:- The Jurisdictional High Court at Calcutta, in the case of Goyal MG Gases Pvt. Ltd [2017 (8) TMI 1515 - CALCUTTA HIGH COURT], while taking note of the fact that the decision in Indsur Global [2014 (12) TMI 585 - GUJARAT HIGH COURT] has been stayed, observed that the Revenue cannot take a stand contrary to that taken in other High Courts and accordingly declared the rule to be invalid.
The decision of jurisdictional High Court of Calcutta in the case of Goyal MG Gases Pvt. Ltd, is followed which has not been stayed and has a binding force as on date. Accordingly, it is concluded that there is no bar in making use of the accumulated Cenvat Credit in making payment of Central Excise Duty even during default period.
Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 1921
Reopening of assessment u/s 147 - Report received from Investigation Wing regarding share capital being received from the two companies - HELD THAT:- Assessee has received share capital from Geefcee Finance Ltd. and from Mahanivesh (India) Ltd. It has filed confirmation, bank Financial Stock statement, ITR and Audited Financial Stock statement of both these companies. The assessment thereafter was completed under section 143(3) of the Act by the AO vide order dated 27.12.2007 meaning thereby the AO has accepted the contention of the assessee. Thereafter the assessment was reopened by issue of notice under section 148 of the Act.
After reopening of assessment the AO has not made any further inquiry. In fact, in the assessment order after making a reference to the report received from investigation wing, the AO has not stated anything particular to the assessee. The AO has also not commented adversely on any of the document available on record regarding these two companies. In view of these facts, the document submitted by the assessee were not rebutted by the AO. It is noted that the reliance placed by the AR on the various judgments supports the case of the assessee whereby it has been held that in the absence of any inquiry made by the AO the addition on this account can’t be sustained.
In the present case falls in the other category as the assessment order is silent about the documents available on record in support of the share capital received by the appellant company. We find that there is no adverse observations or comment about the document available on record and submitted by the assessee in support of the share capital received by it in the original assessment proceedings on the basis of which assessment order dated 27.12.2007 was passed under section 143(3) of the Act. The AO having got the information from the investigation wing, the least he could do to make inquiry from the shareholders, the details of which were already on the record. Thus we delete the addition in dispute and allow the grounds raised by the assessee.
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2019 (2) TMI 1920
Validity of SCN - HELD THAT:- The proceedings under challenge being a show cause notice, the petitioner can as well raise his contentions before the respondent who will of course consider the same and pass final orders on merits and in accordance with law.
Taking note of the special circumstances obtaining in this case, in the event of the final order being adverse the petitioner, the petitioner is given liberty to invoke the writ jurisdiction of this Court again - Petition closed.
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2019 (2) TMI 1919
Offence punishable under Sections 276(1) & 277 - petitioner had willfully and deliberately filed the return of income on 29.07.2002 without reflecting the investment in the form of bank balance in a foreign bank account, thereby, attempted to evade the tax - Also petitioner had stated false statement in verification under the Act and false return of income for the Assessment Year 2002-03 - Commissioner (Appeals) has observed such, he has reduced the penalty from 300% to 100%, for the reason that when these things were brought to the notice of the petitioner, he accepted and agreed for the addition, without protest. On this score alone, the Commissioner (Appeals) has reduced the penalty - HELD THAT:-here are two things for this Court to analyse here. One is that the penalty can be reduced / waived under Section 273A of the Act, provided the assessee should voluntarily and in good faith, made full and true disclosure of particulars and also has co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment. Here in the case on hand, admittedly, the petitioner has paid the tax amount, without protest and in the meantime, without prejudice to his stand. In other words, the petitioner can still fight for his case. Moreover, the provision is very clear that the assessee should voluntarily give such disclosure.
It does not brush aside the fact that the petitioner has not satisfied the ingredients of Section 273A of the Act, ie., made disclosures voluntarily and in good faith.
The next thing for this Court to analyse here is that Clause 5 of Section 273A of the Act clearly says that every order made under this Section shall be final and shall not be called into question by any court or any other authority. But, the order, which the petitioner refers here for his rescue, ie., the order dated 25.03.2014 passed by the Commissioner (Appeals) under Section 250(6) of the Act, is an appealable order and the same has already been put under challenge by the Department before the Income Tax Appellate Tribunal, where the order of the Commissioner (Appeals) was upheld. Therefore, it is clear that the order passed by the Commissioner (Appeals) reducing the penalty is not an order under Section 273A of the Act and therefore, this Court, with due respect to the decision of the Hon'ble Supreme Court, is inclined to infer that Section 279(1A) of the Act will not come to the rescue of the petitioner.
Since all the grounds raised by the petitioner for quashing the complaint lack merits, this Criminal Original Petition is liable to be dismissed and the same is accordingly, dismissed. Considering the age of the proceedings, the learned Additional Chief Metropolitan Magistrate (Economic Offences – 1), Egmore, is directed to expedite the trial and conclude the same, as expeditiously as possible. Consequently, connected miscellaneous petitions are closed.
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2019 (2) TMI 1918
Deduction u/s 35(1)(iv) - weighted deduction under section 35(2AB) - Disallowance of claim as no approval of expenditure has been received from the DSIR in form No.3CL - claim was not made by the assessee either in the original return of income or in the revised return of income - HELD THAT:- The Hon’ble High Court of Delhi in Maruti Suzuki India Ltd. Vs. Union of India [2017 (8) TMI 248 - DELHI HIGH COURT] had laid down that what was relevant was not the date of recognition or cutoff date mentioned in the certificate of DSIR or even the date of approval, but the existence of recognition. It was further held that if R&D centre is not recognized, it is not entitled to deduction; but if it is recognized, it is entitled to the benefit.
Tribunal in Cummins India Ltd. [2018 (5) TMI 1314 - ITAT PUNE] while deciding the issue of allowability of claim of weighted deduction under section 35(2AB) of the Act on the surmise that the prescribed authority had approved part of expenditure in Form No.3CL had held that once the facility has been recognized by the prescribed authority and an agreement has been entered into between the facility and prescribed authority, then the role of Assessing Officer is to look into and allow the expenditure incurred on in-house R&D facility as weighted deduction under section 35(2AB) of the Act.
Thus it is not the requirement of law to get any certification / approval of expenditure from the DSIR in form No.3CL, there is no merit in the orders of authorities below in denying weighted deduction under section 35(2AB) of the Act. It may further be pointed out that the assessee on a later date had received the said form No.3CL from the DSIR on 08.04.2013. Accordingly, we direct the Assessing Officer to allow weighted deduction at 150% of expenditure incurred in the hands of assessee under section 35(2AB) of the Act. Hence, revised ground of appeal No.1 raised by assessee is allowed.
Disallowance made under section 14A r.w.r. 8D - HELD THAT:- We find merit in the plea of assessee in this regard, where the assessee had sufficient own funds to make the aforesaid investments and applying the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] we hold that no disallowance is to be made on account of interest expenditure under Rule 8D(2)(ii) of the Rules. Hence, ground of appeal No.4 raised by assessee is allowed.
Disallowance of commission paid to liaison representatives - HELD THAT:-From the details furnished by assessee it transpires that liaison representatives were involved in technical issues such as quality control, chemical composition as well as day-to-day issues on sample approval, etc. and especially in view of statement recorded during Survey, we find merit in the plea of the learned Departmental Representative for the Revenue that total expenditure on this behalf cannot be allowed in the hands of assessee. The CIT(A) while allowing the claim in the hands of assessee had in turn, relied on the decision of Tribunal in the case of a Limited Company, whereas the assessee before us was a Private Limited Company and the said ratio cannot be applied. Accordingly, in order to plug loopholes and leakage of revenue, we direct the Assessing Officer to disallow 5% out of commission and liaison expenses.
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2019 (2) TMI 1917
Admissibility of Sections 11 and 12 - AO had ruled that the assessee was disentitled to the exemptions - CIT(A) and the ITAT, h reversed the decision and relied upon the decision of this Court in India Trade Promotion Organization vs. DGIT [2015 (1) TMI 928 - DELHI HIGH COURT].
Double benefit claimed by the assessee i.e. towards depreciation reported in respect of the assets acquired out of previous exempt income - Tribunal relied upon a binding decision of the Supreme Court in CIT vs. Rajasthan & Gujarat Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT]
Both questions urged are answered by the decisions of this Court and the Supreme Court. Therefore, no substantial question of law arises.
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2019 (2) TMI 1916
Addition invoking provisions of section 43CA - difference between stamp duty valuation and actual consideration - application of the case laws with regard to Section 50C - HELD THAT:- We refer to the decision of the Co-ordinate Bench of the Tribunal, Pune in the case of Rahul Construction [2012 (1) TMI 229 - ITAT PUNE] there is a wide variation between the two values and that they are based on some estimate. Difference between the sale consideration shown by the assessee and the fair market value determined by the DVO which is less than 10%. In view of the fact that valuation is always a matter of estimation where some difference is bound to occur. The Assessing Officer was not justified in substituting the value determined by the DVO for the sale consideration disclosed by the assessee. Therefore, Assessing Officer was directed to take ₹ 19,00,000/- only as the sale consideration of the property.
This case of Rahul Construction Vs. DCIT (supra.) was also followed by the Pune Bench of the Tribunal in [2012 (1) TMI 229 - ITAT PUNE] therein also, the benefit of 10% difference of sale value was allowed in favour of the assessee. Thus, following the aforesaid decisions, we are of the considered view that difference between the sale consideration of the property shown by the assessee and the fair market value determined by the DVO under section 50C(2) being less than 10%, the Assessing Officer is not justified in substituting the value determined by the DVO for the sale consideration disclosed by the assessee. - We set aside the order of the Ld. CIT(Appeal) and allow the appeal of the assessee.
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2019 (2) TMI 1915
Computation of deduction under section 10A - exclusion of expenditure from both the export turnover and total turnover for the purposes of computation of deduction u/s 10A - HELD THAT:- This issue before us stands covered by the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Tata Elxsi Ltd.[2011 (8) TMI 782 - KARNATAKA HIGH COURT] which proposition has been upheld by the Hon’ble Apex Court in the case of CIT Vs. HCL Technologies Ltd., [2018 (5) TMI 357 - SUPREME COURT]. The only grievance of Revenue in the grounds raised was that the decision of the Hon’ble Karnataka High Court in the case of Tata Elxsi Ltd., (supra) had not attained finality and an SLP by the Department is pending before the Hon’ble Apex Court. Now, in view of the decision of the Hon’ble Apex Court in HCL Technologies Ltd.,[2018 (5) TMI 357 - SUPREME COURT]this issue is no longer res integra and therefore we find no reason to interfere in the decision of the DRP on this issue.
Working Capital Adjustment - DRP in restricting the working capital adjustment on the basis of advances received from AEs in the absence of debtors and inventory in the case of the assessee for calculating the cost of working capital built in the profit margin - Based on the discussions in the body of the TP order, the assessee had raised objections before the DRP, which had issued directions that no such restriction shall be made on the working capital adjustment and it shall be granted as per actuals. As the working capital adjustment has been granted at actuals i.e., (-)1.40%, without making any restriction as contended by Revenue in the grounds of appeal, ground Nos. 4 and 5 raised on this issue are infructuous as they require no adjudication and are accordingly dismissed as infructuous.
Exclusion of M/s. Acropetal Technologies Ltd., (Acropetal) - DRP has not adjudicated on the functional comparability of ‘Acropetal’ vis-à-vis the assessee in the case on hand. Instead, the DRP has rendered a finding that the services rendered by ‘Acropetal’ are predominantly on-site services and applied the on-site filter. The DRP further directed that ‘Acropetal’ needs to be excluded from the set of comparables as its employee cost is less that 25% and employee cost filter should be applied.
As seen that neither the assessee in its TP study nor the TPO has applied the on-site filter while determining the ALP. Similar is the case with employee cost filter; which has neither been applied by the assessee nor by the TPO while determining the ALP. As such the DRP has applied these filters suo moto. When new filters are applied, it is necessary to examine whether such an application of a new filter has any impact on the other companies about their inclusion or exclusion. It is also seen that the DRP has not rendered a finding on the functional comparability of ‘Acropetal’ even though a specific ground has been raised and the judicial decisions in this regard have been brought to the notice of the DRP. In view of the above, we deem it appropriate to remand the issue of comparability of Acropetal Technologies Ltd., back to the file of the TPO with a direction that the two filters i.e., on-site filter and employee cost filter, applied by the DRP suo moto, may be applied to the other comparable companies as well and functional capacity be decided.
Exclusion of ICRA Online Ltd. and Sundaram Business Services Ltd. - In the absence of any such discussion or decision being rendered, as claimed, applying the 75% export earning filter suo moto is not tenable. Further, if any new filters are applied, it is imperative to examine whether the application of such a filter has any impact on the other companies about their inclusion or exclusion in the set of comparables. That ‘ICRA’ was not selected as a comparable by TPO’s in other cases cannot be a valid ground for exclusion in this case also, unless the reasons for such exclusion in other cases are known. In view of the above, we deem it appropriate to remand the issue of comparability of this company i.e., ICRA Online Ltd., to the file of the TPO with the direction that the filter applied suo moto by the DRP in the case of ‘ICRA’ be applied to the entire set of comparable companies.
Company, ‘Sundaram’, was selected as a comparable by the TPO and the assessee had accepted the same without any objection. We find that the DRP suo moto examined the comparability of this company and directed its exclusion from the set of comprables on the ground that it fails the 75% export earning filter, a new filter introduced by the DRP, which was not applied either by the TPO or the assessee. Since we have taken the stand that if any new filter is applied, it should be applied uniformly on the entire set of comparable companies, we deem it appropriate to remand the issue of comparablity of this company, Sundaram Business Services Ltd., back to the file of the TPO with a direction that the 75% export earning filter, applied, suo moto, by the DRP, be applied on the entire set of comparable companies.
Exclusion of Infosys BPO Ltd., (Infosys) on grounds of functional dissimilarity, the application of new filters by the DRP will have no bearing on its exclusion or inclusion as it would continue to remain excluded on grounds of functional comparability. Therefore, we find there is no need to remand the comparability of this company to the file of the TPO, as sought for by the learned DR. Consequently, ground of Revenue’s appeal is dismissed.
Exclusion of Eclerx Services Ltd. - No infirmity in the order of the DRP and the direction of the DRP to exclude ‘Eclerx Services Ltd.,’ from the set of comparables is upheld, since this company ‘Eclerx’ is excluded on grounds of functional dissimilarity, the application of new filters by the DRP will have no bearing on its exclusion or inclusion as it would continue to remain excluded on grounds of functional comparability. Therefore, there is no need to remand the matter to the TPO, as sought for by the learned DR.
Accentia Technologies Ltd., be excluded from the list of comparable companies on grounds of functional dissimilarity.
Jeevan Scientific Technology - new filters applied suo moto may be applied on the other comparable companies as well and then the inclusion/exclusion of this company as a comparable be decided.
Comparability of R Systems International Ltd - Respectfully following the decision of Mercer Consulting Pvt. Ltd., [2016 (8) TMI 1163 - PUNJAB AND HARYANA HIGH COURT], we also deem it appropriate to follow the principle that if data, relating to the financial year in which the international transaction has been entered into, is directly available from the annual accounts of that company, then the company ought be examined / considered for comparability. We, accordingly, remand the matter of comparability of R Systems International Ltd., back to the file of the AO to examine / decide afresh.
Short Credit for TDS - HELD THAT:- AO directed to examine and verity the assessee’s claim in respect of grant of short credit for TDS in accordance with law.
Charging of interest u/s 234D - HELD THAT:- The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT] therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234D of the Act. The AO is, however, directed to recompute the interest chargeable u/s 234D of the Act, if any, while giving effect of this order.
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2019 (2) TMI 1914
Classification of the product - Odomos - medicament classifiable under sub - heading 3004 90 99, or otherwise? - HELD THAT:- Heading 3808 of Chapter 38 of Customs Tariff Act covers a range of products (other than those having the character of medicaments, including veterinary medicaments-heading 30.03 or 30.04) intended to destroy pathogenic germs, insects, (mosquitoes, moths, Colorado beetles, cockroaches, etc.) mosses and moulds, weeds, rodents, wild birds, etc. products intended to repel pests - the statue is very clear as far as the classification of items intended to repel pests is concerned and same evident from explanatory note to Chapter 38.08 of Customs Tariff.
Thus, the product ‘odomos' achieves its result by odour which makes the conditions unattractive for mosquitoes when coated on human body and accordingly it appears well covered under chapter 38.08 of Customs Tariff Act adopted for the purpose of classification of products under GST Law. Further, the Applicant has been constantly supplying the said product under chapter 38.08 (as per the Jurisdictional report).
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2019 (2) TMI 1913
Seeking appointment of an independent arbitrator to adjudicate the disputes that had arisen between the Petitioner and Respondent No. 2 - HELD THAT:- In the instant case, the learned Single Judge in the impugned Order has erroneously taken the view that an arbitration clause would not stand incorporated in the individual sale orders entered into by the Respondent No. 2 – Coal Company and the Appellant. The individual sale orders emanate out of the 2007 Scheme. The sale orders specifically state that they would be governed by the guidelines, circulars, office orders, notices, instructions, relevant law etc. issued from time to time by Coal India Limited or Bharat Coking Coal Limited etc. As a consequence, the arbitration clause (i.e. Clause 11.12) in the 2007 Scheme would stand incorporated in the sale orders issued thereunder.
The words “in relation thereto” used in Clause 11.12 of the 2007 Scheme indicate that the clause would apply to all transactions which took place under the 2007 Scheme. This would include the sale transactions in the present case.
Appeal allowed.
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2019 (2) TMI 1912
Disallowance of interest expenditure u/s 36(1)(iii) - assessee company has used the borrowed funds for non-business purpose - CIT-A deleted addition - HELD THAT:- Since the facts of the instant case are identical to the facts of the case decided by the Tribunal in assessee’s own case for assessment years 2007-08 and 2010-11 [2019 (1) TMI 992 - ITAT DELHI], therefore, in absence of any contrary material brought to our notice against the order of the Tribunal and considering the fact that the own capital and free reserves are substantially higher than the investments, we find no infirmity in the order of the CIT(A) deleting the disallowance made by the Assessing Officer u/s 36(1)(iii). We, therefore, uphold the order of the CIT(A) and the grounds raised by the Revenue are dismissed.
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2019 (2) TMI 1911
Deduction u/s 80HHC - Interest charged /earned from purchasers for the period of 90 days on the delayed payment of sale consideration - whether can be said to be income from other sources and /or it can be said to have nexus with its business activities for which the assessee is allowable the deduction under Section 80HHC? - HC held that interest earned /charged by the assessee on the delayed payment of sale consideration (for 90 days) is not required to be excluded for the purpose of computation of deduction under Section 80HHC - HELD THAT:- SLP dismissed.
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2019 (2) TMI 1910
Addition u/s 68 - unexplained share application money where the identity, genuineness and creditworthiness of the lenders were not proved - HELD THAT:- Assessee has raised money by way of share capital and share application money from 12 parties during the financial year 2006-07 from Shri Pravin Kumar Jain group companies. A search conducted on the said group revealed that the said group was engaged in providing hawala accommodation entries without any business. This was also confirmed by the directors during the recording of their statements during search. So the AO treated the entire money raised as bogus share capital and share application money just on the basis of statements of the directors of these companies.
Asessee’s name was nowhere mentioned by the said entities during search to be beneficiaries of such entries. During the course of assessment proceedings the assessee filed various evidences such as share application forms along with letters of acceptance, confirmation letters, copies of PAN numbers, copies of ITR acknowledgment, balance sheets, profit and loss accounts, master data of companies from MCA website, copies of bank accounts to evidence the transactions through banking channels, copies of MA & AA and share certificates of all the companies. All these transactions were entered into through banking channels and these companies are active on the website of Ministry of Corporate Affairs. Despite the filing all these information with the AO, he did not conducted any verification or investigation to dig out the truth but acted on the information supplied by the investigation wing. CIT(A) considered the contentions of the assessee in detail and came to the conclusion that assessee has duly proved the genuineness, identity and creditworthiness of the parties by filing all the necessary evidences during assessment proceedings.
Addition made under Section 68 is bad in law. These Companies are the assessee's Shareholders - Decided against revenue.
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