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2016 (3) TMI 1274 - ITAT DELHI
Validity of the reassessment - Held that:- In the present case, it is very much evident from the assessment order itself that the assessing officer was having nothing except the list provided by the CIT Central-II, New Delhi. He was not having the copies of the statement, assessment orders and other details which could enable him to apply his mind and form a belief that income has escaped assessment. In fact these information was not there with the assessing officer till 27.12.2013. Thus in our view this is a clear case of total non-application of mind by the assessing officer.
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2016 (3) TMI 1273 - ITAT CHANDIGARH
Rejection of claim u/s 80G(5)(vi) - empower Deputy Director(Systems) to hear any matter under section 12AA and 80G(5)(vi) - Held that:- It is for the Ld. CIT(Exemptions) to hear and conduct the proceeding himself, after giving opportunity of being heard to the assessee shall pass an order in accordance with law. The order sheet clearly shows that only at the end of entire order sheet the Ld. CIT(Exemptions) put his initial. The impugned order are therefore violative of the provisions of law and does not given power to the CIT (Exemptions) to delegate his power to the Deputy Director (Systems) to hold enquiry and proceedings under the above provisions. The assessee therefore rightly contended that the order is passed arbitrary without giving any proper / personal opportunity of being heard in the matter. In this view of the matter, we are of the view that impugned orders of the Ld. CIT(Exemptions) cannot be sustained in law and the matter requires re-consideration at the level of CIT(Exemptions) Chandigarh.
We accordingly set aside the both the impugned orders and restore the matter in issue to the file of CIT(Exemptions) Chandigarh with direction to re-decide both the matters afresh. Appeal of the assessee are allowed for statistical purpose.
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2016 (3) TMI 1272 - DELHI HIGH COURT
Foreign exchange gain/loss - whether to be considered as an item of operating revenue/cost - Held that:- ITAT has in the impugned order noted the fact that the foreign exchange gain earned by the Assessee is in relation to the trading items emanating from the international transactions. Since the foreign exchange loss directly resulted from trading items, it could not be considered as a nonoperating loss. Further, it is noted by the Dispute Resolution Panel that the service agreement between the Associated Enterprise (AE) and the Assessee stated that for the specified products and services provided by the Assessee, it "shall raise invoices on Ameriprise USA on the basis of a cost plus pricing methodology." The ITAT was therefore right in holding that the AO was not justified in considering the foreign exchange loss as a non-operating cost.
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2016 (3) TMI 1271 - ITAT BANGALORE
TPA - selection of comparables - Held that:- Assessee is engaged in providing software development and call centre services only to its Associated Enterprise [AE]. Being the captive service provider, it has remunerated for the services on the basis of cost + 15% mark up, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
Computation done by the AO u/s. 10A by excluding expenditure of travel expenses, telecommunication expenses from the definition of export turnover - Held that:- There is no evidence on record that travel expenses pertain to rendering of services. Travel expenses cannot be included in freight. Therefore, we are of the opinion that travel expenses incurred in foreign exchange alone cannot be disallowed from the export turnover. Therefore, we direct the AO to exclude this amount. Coming to the issue of telecommunication expenses, nothing was brought on record that the same was not incurred in connection with export of software or rendering of services. This expenditure can be attributable to the telecommunication expenses which the provisions require exclusion from export turnover. However, since the amount of ₹ 1,38,70,965/- was considered as ‘telecommunication expenses’, which are reduced from export turnover, we direct the AO/TPO to exclude the same from also the total turnover while computing the deduction u/s. 10A of the Act. The jurisdictional High Court in the case of CIT Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that whatever is excluded from export turnover should also be excluded from the total turnover. Consequently, AO is directed to exclude the same from total turnover as well.
Levy of interest u/s. 234B & 234D - Held that:- These are consequential in nature. However, AO is directed to give the working to assessee if any interests are being levied or charged while giving effect to this order.
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2016 (3) TMI 1270 - ITAT BANGALORE
Denial of deduction u/s. 10A - non-production of export invoices - Held that:- AO has wrongly disallowed the claim. Initially, the claim was disallowed on non-production of FIRC’s. In the post DRP proceedings, the disallowance was made on non-production of invoices. We are not convinced with reasons stated by the AO. In fact, his order states that assessee has shown invoice value to the extent of ₹ 17,11,75,098/- as against ₹ 17,33,92,390/- and balance was reconciled. Be that as it may, now assessee undertakes to produce the copies of invoices to the AO. Therefore, without going into the merits of action of AO, we direct the AO to examine the same and allow the claim. The issue of claim of 10A is accordingly set aside to the AO for that limited purpose.
Claim of deduction u/s. 10A. - AO excluded leased line charges and travelling expenses from the export turnover but has not reduced from the total turnover - Held that:- This issue was already decided by the jurisdictional Hon'ble High Court in the case of Tata Elxsi Ltd., Vs. CIT (2011 (8) TMI 782 - KARNATAKA HIGH COURT) wherein it was held that whatever expenses reduced from export turnover should also be reduced from total turnover, while computing the deduction u/s. 10A of the Act. We direct the AO accordingly.
TPA - comparable selection criteria - Held that:- Assessee has rendered software development services thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2016 (3) TMI 1269 - ITAT PUNE
TPA - comparable selection - application of filters for selection - Held that:- The assessee company was engaged in providing various software development and other ITES services to its associate enterprises. The assessee was a captive service provider to its associate enterprise M/s. Avalara INC, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
We find merit in the claim of assessee that in case certain filters are picked up by the Assessing Officer and applied, then as per the revised filters picked up by the Assessing Officer in case certain concerns fall within those filters, then the margins of the said concerns need to be applied for benchmarking international transaction of the assessee, by selecting the said concerns in the final set of comparables. Accordingly, we direct the Assessing Officer to consider the results of the said concerns and in case, they fulfill the conditions of filters applied by Assessing Officer while benchmarking the international transaction of the assessee, then the said two concerns may be so selected in the final set of comparables.
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2016 (3) TMI 1268 - KARNATAKA HIGH COURT
Deduction under Section 10A - whether Tribunal is right in law concluding that the deduction u/s 10A can be allowed before determining the gross total income and without setting off the business loss of DTA unit with the profit of EHTP unit resulting in carry forward of depreciation loss and without considering the Circular NO.7 of 2013 issued by CBDT wherein necessary clarifications have been issued with this regard and further holding that proceeding initiated under Section 263 is invalid even when same is done in accordance with parameters of the said provision? - Held that:- The issue is already covered by the decision of this court in the case of Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] it cannot be said that any substantial question of law would arise for our consideration as canvassed. However, in the event the Apex Court takes a different view, the revenue may take appropriate action in accordance with law.
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2016 (3) TMI 1267 - SC ORDER
Denial of rebate claim - Duty paid mistakenly - export of goods - the decision in the case of ARVIND LTD. Versus UNION OF INDIA [2014 (5) TMI 171 - GUJARAT HIGH COURT] contested, where it was held that when the petitioner is not liable to pay duty in light of the absolute exemption granted under Notification No. 29/2004 as amended by Notification No. 59/2008-C.E. read with the provision of Section 5A(1A) of the Act and when it has not got any other benefit in this case, other than the export promotion benefits granted under the appropriate provision of the Customs Act and Rules (which even otherwise he was entitled to without having made such payment of duty), we are of the firm opinion that all the authorities have committed serious error in denying the rebate claims filed by the petitioner under Section 11B of the Act read with Rule 18 of the Rules - Held that: - the decision in the above case upheld - SLP dismissed.
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2016 (3) TMI 1266 - ITAT AMRITSAR
Entitlement to exemption u/s 54B - purchase of some part of agricultural land before the date of sale - Held that:- CIT(A) has made a clear finding of fact that payment for purchase of such land was made out of advances received by assessee against sale of land and in fact he has held that payments were directly made by buyer of agricultural land to the seller who had sold land to the appellant. The learned CIT(A) has further relied upon the CBDT circular No.359 dated 10.05.1983 which refers to section 54E of the Act. As per said circular the exemption u/s 54E of the Act is available to an assessee if part of sale consideration or earnest money or the advances received against sale of asset is invested in specified assets before the date of transfer of assets.
CIT(A) has rightly held that by executing the agreement to sell by transferor a right is credited in favour of transferee. The transferor is restrained from selling the said property to someone else because the transferee, in whose favour the right in personam is created, has a legitimate right to enforce specific performance of the agreement, if the transferor for some reasons do not execute the sale deed. Therefore, when the assessee purchased land by way of execution of an agreement by the transferor irrespective of the fact that sale deed could not be entered the assessee is eligible to enforce his right and therefore, he has rightly held that assessee is deemed to have purchased the land. In view of the above findings of learned CIT(A), he has rightly allowed the exemption u/s 54B of the Act. - Decided in favour of assessee.
Deduction of eviction charges u/s 48(1) - payments for eviction of land was made as the Assessing Officer had verified the confirmation of payments received by eleven persons who were paid the amounts for eviction - Held that:- CIT(A) has rightly allowed the deduction of such eviction charges u/s 48(1) of the Act. We further find that in the case of a joint owner Mr. Jit Singh who had also paid similar eviction charges and learned CIT(A) has deleted the addition made by Assessing Officer on account of eviction charges, and the Department has not filed any appeal for allowance of eviction charges by learned CIT(A). - Decided in favour of assessee.
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2016 (3) TMI 1265 - GUJARAT HIGH COURT
Scheme of Arrangement - Held that:- The proposed Scheme does not envisage any arrangement or compromise with the creditors of the Applicant Transferee Company. The Applicant Company shall continue its business operations. The Applicant Company undertakes to fulfill all its liabilities towards the Creditors in the normal course of its business. Moreover, a certificate by the Chartered Accountant, confirming that the Net Worth of the Applicant Company as on 31st December 2015, has been placed on record. A perusal of the same indicates that prior to giving effect to the proposed Scheme, the Net Worth of the Applicant Company was ₹ 222.9 crores; Whereas in the Post-Scheme scenario, it shall be approximate ₹ 154.9 crores.
The Net Worth being substantially high, and considering the above noted facts and circumstances, and the submissions advanced it is held that the meeting of the Unsecured Creditors, for considering and approving the proposed Scheme, is not necessary and the same is dispensed with.
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2016 (3) TMI 1264 - GUJARAT HIGH COURT
Scheme of Amalgamation - Held that:- Having heard Mr.Navin K. Pahwa, learned advocate for the applicant and considering the fact that all the Equity Shareholders and the Unsecured Creditors of the applicant Company have given their consent in writing, as required under Section 391(2) of the Act, to the proposed Scheme of Amalgamation for amalgamating the applicant Company with Swapna Srushti Horizon Private Limited, the meetings of the Equity Shareholders and the Unsecured Creditors of the applicant Company are ordered to be dispensed with.
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2016 (3) TMI 1263 - GUJARAT HIGH COURT
Scheme of Amalgamation - whether Holding Transferee Company is not required to take out separate proceedings for obtaining the sanction of this Court to the proposed Scheme of Amalgamation of its wholly owned subsidiary Company, with itself? - Held that:- No separate proceedings are required to be undertaken by the Transferee Company, being the Holding Company, under the provisions of Section 391(2) of the Companies Act, 1956.
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2016 (3) TMI 1262 - GUJARAT HIGH COURT
Scheme of Arrangement - dispensation of the meeting of the Equity Shareholders, Preference Shareholders, Secured and Unsecured Creditors of the Applicant Transferor Company - Held that:- a. The meeting of the Equity Shareholders of the Applicant Transferor Company is dispensed with, in view of the consent letters of all the Equity shareholders and the Chartered Accountant’s certificate, certifying the list of Equity Shareholders.
b. The meeting of the Preference Shareholders of the Applicant Transferor Company is dispensed with, in view of the consent letters of all the Preference Shareholders and the Chartered Accountant’s certificate, certifying the list of Preference Shareholders.
c. The meeting of the Secured Creditor of the Applicant Transferor Company is dispensed with, in view of the fact that there are no Secured Creditors of the Applicant Transferor Company.
d. The meeting of the Unsecured Creditors of the Applicant Transferor Company is dispensed with, in view of the consent letters of all the Unsecured Creditors and the Chartered Accountant’s certificate certifying the list of Unsecured Creditors.
e. Publication of notice in the Official Gazette is ordered to be dispensed with.
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2016 (3) TMI 1261 - DELHI HIGH COURT
Constitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - Prohibition on assessee from utilising cenvat credit for payment of excise duty for default in payment of duty - the order of the Gujarat High Court in Indsur Global Ltd. v. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] has been stayed - the Appellant is restrained from recovery of its dues from the Respondent till the disposal of this petition.
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2016 (3) TMI 1260 - GUJARAT HIGH COURT
Scheme of amalgamation - Held that:- All the Equity Shareholders and sole Unsecured Creditor of the applicantCompany have approved the Scheme in the form of written consent letters. All these consent letters are annexed with the application as Annexures' D' and 'F', respectively. There are no Secured Creditors of the applicantCompany as on date. The certificates confirming the status of the Shareholders and Creditors as well as the receipt of the consent letters from all the Shareholders and sole Unsecured Creditor are annexed as Annexures' E' and 'G', respectively. In view of the same, dispensation is sought from convening meetings of the Equity Shareholders and sole Unsecured Creditor of the applicantCompany and considering the facts and circumstances and the submissions advanced, the same is, hereby, granted.
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2016 (3) TMI 1259 - GUJARAT HIGH COURT
Scheme of Arrangement in the nature of Demerger - Held that:- Chairman appointed for the aforesaid meetings shall issue advertisements and send out notices of the said meetings referred to above. It is further directed, that the Chairman of the meetings shall have all powers under the Articles of Association of the applicant Company and under the Companies (Court) Rules, 1959 in relation to conduct of meetings, including an adjournment of the meetings, and/or an amendment to the Scheme or resolution, if any, proposed at the meetings by any person(s) and to ascertain the decision of the meetings on a poll.
That the quorum for the said meetings shall be 10(Ten) for the meeting of the Equity Shareholders, 3 (Three) for the meeting of the Secured Creditors, and 10(Ten) for the meeting of Unsecured Creditors present in person or through authorized representative or through proxy.
That voting by proxy is permitted provided that the proxy in the prescribed form and duly signed by the person entitled to attend and vote at the aforesaid meetings, or by his authorised representative, is filed with the applicant Company at its registered office at Dalpur, not later than 48 hours before the said meeting.
That the value of the vote of each Equity Shareholder of the Company shall be as per the entries in the Registers of the Company and that of the creditors as per the entries in the books of accounts of the applicant Company and where the entries in the records or registers are disputed, the Chairman of the meetings shall determine the value or number for the purposes of the meetings and his decision in that behalf would be final.
That the Chairman shall report to this Court, the result of the said meetings within 14 (fourteen) days of the conclusion of the meetings and the said Report shall be verified by his affidavit.
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2016 (3) TMI 1258 - ITAT BANGALORE
TPA - selection of comparable - Held that:- Assessee was a 100% export-oriented unit and providing ITE services to its holding company in British Virgin Islands, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2016 (3) TMI 1257 - RAJASTHAN HIGH COURT
Scheme of amalgamation - direct that the meetings of shareholders, creditors secured and unsecured of companies other than the meeting of unsecured creditors of Mindscape One Marketing Private Limited be dispensed with. The meeting of the unsecured creditors of Mindscape One Marketing Private Limited however be held to examine the proposed scheme of amalgamation.
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2016 (3) TMI 1256 - ITAT BANGALORE
TPA - selection criteria for comparables - Held that:- Assessee is a wholly owned subsidiary of Novell Inc., USA (Novell US). Novel US, helps customers realise the value of their information and deliver it securely and economically to their stake holders across any platform. Assessee provided software development and support services to Novel, US Inc. Financial, thus functionally dissimilar companies to be deselected from final list.
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2016 (3) TMI 1255 - SUPREME COURT
Transfer of title in favour of the nominee - case of a valid nomination under Section 79 of the 1983 Act - inheritors or successors to the property of the deceased - member of 'the Cooperative Society' requirment to nominate a person in whose favour 'the Cooperative Society' would dispose of the share or interest of the member “on his death” - Held that:- As is postulated under Section 79 of the 1983 Act, Rule 127 of the 1987 Rules provides, that if a nomination has been made by a member under Section 79, the share or interest or the value of such share or interest standing in the name of the deceased member, would be transferred to the nominee.
Rule 127 postulates nomination only in favour of a person “belonging to his family”. It is not necessary for us to deal with the issue whether the appellant – Indrani Wahi, being a married daughter of the original member – Biswa Ranjan Sengupta, could be treated as a member of the family, of the deceased member (Biswa Ranjan Sengupta), because the learned Single Judge, as also, the Division Bench of the High Court concluded, that the appellant – Indrani Wahi was a member of the family, of the original member - Biswa Ranjan Sengupta. This conclusion has not been assailed by the respondents, before this Court.
Rule 128 of the 1987 Rules also leads to the same inference. Inasmuch as Rule 128 aforementioned provides, that only in the absence of a nominee, the transfer of the share or interest of the erstwhile member, would be made on the basis of a claim supported by an order of probate, a letter of administration or a succession certificate (issued by a Court of competent jurisdiction).
Insofar as the instant aspect of the matter is concerned, there is no doubt in our mind, that even Rules 127 and 128 of the 1987 Rules, lead to the inference, that in case of a valid nomination, under Section 79 of the 1983 Act, 'the Cooperative Society' is liable to transfer the share or interest of a member in the name of the nominee. We hold accordingly.
Having recorded the above conclusion, it is imperative for us to deal with the conclusion recorded in paragraph 6 (already extracted above) of the judgment of this Court in the Usha Ranjan Bhattacharjee case (1997 (3) TMI 621 - SUPREME COURT OF INDIA ). In this behalf, it is necessary to clarify that transfer of share or interest, based on a nomination under Section 79 in favour of the nominee, is with reference to the concerned Cooperative Society, and is binding on the said society. The Cooperative Society has no option whatsoever, except to transfer the membership in the name of the nominee, in consonance with Sections 79 and 80 of the 1983 Act (read with Rules 127 and 128 of the 1987 Rules). That, would have no relevance to the issue of title between the inheritors or successors to the property of the deceased. Insofar as the present controversy is concerned, we therefore hereby direct `the Cooperative Society' to transfer the share or interest of the society in favour of the appellant – Indrani Wahi. It shall however, be open to the other members of the family (presently only the son of Biswa Ranjan Sengupta – Dhruba Jyoti Sengupta; we are informed that his mother – Parul Sengupta has died), to pursue his case of succession or inheritance, if he is so advised, in consonance with law. Appeal stands allowed in the above terms.
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