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Showing 201 to 220 of 1962 Records
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2017 (3) TMI 1765
Registration u/s 12AA denied - assessee was already enjoying exemption u/s 10(23C)(iiiad) and was considered as engaged in the sole object of imparting education - HELD THAT:- In “Bharati Vidyapeeth Medical Foundation vs. ACIT” [2012 (12) TMI 1062 - ITAT PUNE], it has been held that when the law permits the assessee trust to claim exemption either u/s 10(23C) or u/s 11 of the IT Act, the choice should be left to the assessee and the assessee cannot be denied exemption u/s 11 on the ground that it ought to have claimed exemption u/s 10(23C), more so, when it has been granted the benefit of exemption u/s 11 in the past.
CIT(E) has given another reason for declining registration, in para 9, that two of the institutions, namely, Doaba College and Kanya Maha Vidayalaya, run by the assessee society, have been declined registration u/s 10(23C)(vi) on the ground that they are not solely established for the purpose of imparting education and are making systematic profits. This finding of the CIT(E) cannot be sustained, since in cases of both the institutions, the ITAT has allowed the exemption u/s 10(23C)(iiiab) by giving a finding of fact that both the institutions are solely engaged for the purpose of education and are not set up for profit making.
CIT(E) has given a wrong finding that from the examination of the accounts of the society, it is seen that the society is engaged in providing loans to schools under its aegis, to earn interest income. This finding of the CIT(E) is totally misplaced, as is available from the copy of accounts of interest income filed before us, as before the Authority below, for the past 3 years, which clearly shows that interest has been earned only on FDRs and savings bank account and no interest has been charged on the loans granted to the schools.
Order of the ld. CIT(Exemptions) is not sustainable in law. It is, accordingly, reversed. He is directed to grant registration u/s 12AA to the assessee forthwith. - Decided in favour of assessee.
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2017 (3) TMI 1764
Allotment and transfer of right shares - Right shares allotted to other shareholders without intimation to petitioner - oppression and mis-management - Maintainability of petition - section 397/398 of the Companies Act, 1956 - Petitioner was admittedly not holding minimum 10% shares of the Company - time limitation - HELD THAT:- The Government of India has passed an order dated 16.11.2012 (Annexure-4, page 44-48 of material papers filed by the Petitioner) by permitting the Petitioner to file a Petition under section 397/398 of the Companies Act, 1956 against the Management of Gowthami Solvent Oils Private Limited (Respondent Company). So the present petition is maintainable.
Issue of Rights Shares - HELD THAT:- The Petitioner was left with no other option except to question the above decision of the Company, in the first instance by duly reserving her right to question rights issue later. Accordingly, the Petitioner has filed Company Petition No. 07/111/SRB/2000 before the then Company Law Board for restoration of her name in the Register of Members of the Company by reserving her right to agitate the right issue later on. The petitioner is fully justified to file the said case restricting the illegal removal of her name by reserving her right to question the present issue.
Whether the acts alleged in the Company petition constituted acts of oppression and mismanagement so as to invoke Sections 397/398 of the Act? - HELD THAT:- The Company/Respondent, on one hand making allegation that the petitioner was raising vexatious litigation against it, on the other hand, the Company/Respondent itself dragged the litigation upto Apex court and also took so much time to implement orders of CLB. The Company has not changed its mended his ways of dealing with minority shareholders like the petitioners especially when the Company is closely held Company and profit making Company and CLB already held that depriving the shareholding of the petitioner in the Company was illegal. All these acts constitute acts of continuous oppression and mismanagement and these acts justify winding up of the Company but it would certainly prejudice the interest of petitioner and the Company itself as it is admittedly profit making Company.
It is settled position of law that the majority has a right to control and manage the affairs of thee Company in its best interest. However, the issue to be examined in each case is whether majority power has been exercised in good faith in the interest of the Company or only to deprive minority shareholders/the Petitioner of her rights. The Company has a fiduciary relation towards the minority shareholder as much as the corporation itself or its officers or Directors - The Petitioner is entitled for all the three rights issues as applicable to other shareholders of the company in proportionate to the shareholding of the respective shareholders.
The Respondents have raised all frivolous, pleas in opposing the just claim of the Petitioner, which arises pursuant to granting of rights issues in question. The Petitioner was put to untold misery in forcing to approach this Tribunal again. This Tribunal cannot lose sight of frivolous contentions made by Respondents. In view of the above background, continuous oppression on the minority shareholder and mis-management deserves exemplary cost to be imposed to protect the interest of minority shareholders. Since, this frivolous litigation is prosecuted at the instance of Respondent No. 2 & 3 they have to be saddled with the exemplary cost to be borne by them personally from their personal accounts.
The Respondents are directed to allot all the three rights issues shares comprising a total of 5250 shares i.e., 350 in 1991-1992, 2100 shares in 1995-1996 and 2800 shares in 2004-2005 - Petitioner directed to pay the amount of ₹ 13,65,000/- by way of D.D. to the Respondents within a period of four weeks from the date of receipt of copy of the Order and thereafter two weeks time is granted to the Respondents to allot shares accrued through three rights issues to the petitioner and to rectify the members register - Respondents No. 2 and 3 are directed to pay cost of ₹ 50,000/each to the Petitioner and the same is to be paid from their personal account.
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2017 (3) TMI 1763
Disallowance u/s 14A - whether assessee has not received any exempted income? - HELD THAT:- We find that the assessee has not received any exempted income, therefore no disallowance under section 14A is to be made. We have also carefully examined the computation of income and the Balance Sheets and find that the assessee has not earned any exempted income. We have also examined the judgments referred to by the assessee in which a similar proposition has been laid down. Therefore, we are of the view that when the assessee has not received any exempted income, no disallowance under section 14A can be made. We accordingly set aside the order of the CIT(A) and delete the additions made after making disallowance under section 14A of the Act. - Decided in favour of assessee.
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2017 (3) TMI 1762
Exemption u/s 54B - Asseesee purchased the property out of the sale consideration amount received by the Assessee under the agreement of sale before the actual date of execution of sale deed - Ex-parte order - HELD THAT:- On last date of hearing i.e., 09.02.2017, hearing was adjourned at the request of the assessee to 30.03.2017. Despite having issued notice about the date of hearing, none appeared on behalf of the assessee. Therefore we had no option but to hear the appeal ex-parte qua the assessee. Accordingly, we heard the arguments of the revenue and having carefully perused the orders of the authorities below on the impugned issues raised before us in the light of revenue’s contention, we find that CIT(A) has properly adjudicated all the issues raised before us and since no infirmity is pointed out therein, we confirm the order of the CIT(A). Accordingly, the appeal of the assessee stands dismissed.
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2017 (3) TMI 1761
Deduction u/s 10A - Interpretation of Total Turnover & Export Turnover - whether expenses reduced from the export turnover has to be reduced from the total turnover also ? - HELD THAT:- Matter is already covered by the decision of this Court in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT]. Hence, the said question would no more remain as a substantial question of law.
Disallowing set-off of losses of earlier years before deduction under section 10A - HELD THAT:- the matter is covered by the earlier decision of this Court in the case of CIT v. Yokogawa India Ltd. [2011 (8) TMI 845 - Karnataka High Court ] Further, the matter was carried by the Revenue before the Apex Court against the above referred decision of this Court and the Apex Court vide its order in the case of CIT v. Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] has disposed of the appeals.
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2017 (3) TMI 1760
Coverage of the University under the Finance Act, 1994 - HELD THAT:- The University, through its authorised representative, shall appear before the respondent Authority on 12.04.2017, on which date or on a near date, a hearing shall be notified for which personal acknowledgment shall be taken from the authorised representative and hearing shall be proceeded with and orders passed within one month from the date of hearing.
Petition disposed off.
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2017 (3) TMI 1759
Penalty u/s 271(1)(c) - additional income due to the search operation u/s 132 - assessee disclosed the additional income only after he was confronted by the D.I (Inv), New Delhi with certain evidence - HELD THAT:- Leave granted. Hearing expedited.
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2017 (3) TMI 1758
Deduction u/s 80 IB (10) - scope of amendment - HELD THAT:- No doubt, the amendment is effective from 01.04.2010 and the even AY 2010-11 is also covered under the explanation. However, amendment was made by finance act 2009 with effect from 01/04/2010 i.e. after allotment of the Flats by the assessee to Mr.N.Suresh Kumar and Shri Madhukar Gandhi. The Flats were allotted and registered in favour of both the individuals before the amendment came into force. Therefore, we are of the considered pinion that subclause (e) and (f) of Explanation of Sec.80 IB (10) is not applicable in the assessee’s case. The assessee relied on the discussion of this Tribunal ITAT ‘B’ Bench, Chennai in the case of ACIT v. M/s.Elegant Estates [2016 (5) TMI 1441 - ITAT CHENNAI] on similar issue which was held in favour of the assessee.
In the instant case, the sale was made in 2008 and construction agreement was entered in 2008 and UDS was registered in 2008, all the formalities were completed during the FY 2008-09 relevant to the AY 2009-10. Therefore, we hold that the sub clause (e) and (f) of Explanation to Sec.80 IB (10) is not applicable in the case of the assessee and the assessee is entitled for deduction u/s.80 IB (10). Accordingly, we delete the addition made by the AO and set aside the order of the lower authorities. - Decided in favour of assessee.
Disallowance of depreciation on motor cars - No evidence was furnished by the assessee to show that the vehicles are running on hire - HELD THAT:- During the assessment proceedings, the AO asked the assessee to produce details for verification of addition to assets as well as the evidence for running them on hire. The assessee did not produce the details called for by the AO. CIT(A) confirmed the order placing reliance on the findings of the AO. AR did not furnish any evidence to prove that the findings of the AO is erroneous before us. Therefore, we do not find any error in the orders of the lower authorities and the order of the Ld.CIT(A) is confirmed - Decided against assessee.
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2017 (3) TMI 1757
Deduction u/s 80P - HELD THAT:- In the instant case, the assessee is a cooperative credit society providing credit facility to its members and the same is evident from the loans disbursement and it is part of the banking activity of the assessee’s cooperative bank.
Therefore, the said income is eligible for deduction u/s 80P(2)(a)(i) . Moreover, the Board Circular no 18 of 2015 dated 2.11.2015 had clearly states that interest on deposits on non SLR securities is taxable under the head ‘income from business” and are eligible for deduction u/s 80P(2)(a)(i), in the case of Cooperative banks carry on the business of banking.
As mentioned earlier, in this case, the assessee is a cooperative credit society providing credit facility to its members, which is akin to the banking activity. Therefore, we are of the view that the CIT(A) had correctly deleted the addition made by the Assessing Officer.
Hon’ble Kerala High Court in the case of Chirakkal Service Co-op Bank Ltd [2016 (4) TMI 826 - KERALA HIGH COURT] had clearly held that primary agricultural societies registered under the Kerala Cooperative Society Act and classified so, under that Act, are entitled to the benefit of deduction u/s 80P(2)
In the instant case, admittedly, the Joint Registrar (General) Kottayam, by certificate dated 23.12.2011 had certified that the assessee is a primary agricultural credit cooperative society. This fact also admitted by the Assessing Officer at page 2 of the assessment order. In view of the clear finding of the Hon’ble jurisdictional High Court, we are of the view that the assessee is entitled to the benefit of deduction u/s 80P(2) .
As per section 80P(2)(d) interest income received by the cooperative society from its investment from another cooperative society, is eligible for exemption from taxation. The whole of interest income was received from other cooperative society/banks and hence, as per provisions of section 80P(2)(d) of the Act, the same is to be allowed as deduction.
By virtue of section 80P(2)(a)(i) in the case of cooperative society carrying on the business of banking or providing credit facilities to its members, whole of the profits and gains attributable to such activities is eligible for deduction. If the income is derived by a cooperative society from the business of banking or providing credit facility to its members it will fall within the exemption.
The Hon’be Supreme Court, in the case of CIT vs Karnataka State Cooperative [2001 (8) TMI 9 - SUPREME COURT] held that interest from surplus funds kept as deposits in banks, being ancillary and incidental to the carrying on of the business of providing credit facility by the assessee cooperative society to its members, is entitled to deduction u/s 80P(2)(a)(i).
We hold that the Assessing Officer is not justified in denying the benefit of deduction u/s 80P - Decided in favour of assessee.
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2017 (3) TMI 1756
Penalty u/s. 271(1)(b) - non-compliance to notice u/s 142(1) - reasonable cause for non-appearance - assessment order was passed u/s 143(3) and not u/s. 144 - HELD THAT:- Assessment in this case was made under section 143(3) of the Act, which means that there was subsequent compliance to the notices issued by the authorities. We also noted that Ld. counsel also attended before the AO on 17.12.2015 and filed replies in all the cases including the case of the assessee.
AO verbally agreed but counsel’s presence was not recorded. We are of the view that the assessee has a reasonable cause for non-appearance on that day. There is no justification for levying the penalty u/s 271(1)(b) of the Act. Secondly, in this matter, the assessments have been completed u/s 143(3) due to subsequent compliances in the assessment proceedings, which was considered as good compliances and default committed earlier were ignored.
As decided in in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. ADIT [2007 (8) TMI 386 - ITAT DELHI-G] wherein it was held that where the assessee had not complied with notice u/s 142(1) but assessment order was passed u/s 143(3) and not u/s. 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by the Assessing Officer, therefore levy of penalty u/s. 271(1)(b) of the Act was not justified. - Decided in favour of assessee.
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2017 (3) TMI 1755
Transfer pricing adjustment - comparable selection - as per assessee TP study of the assessee has been rejected for the reason that the foreign AE was taken as a tested party - Whether the foreign entity in international transactions can be selected as a tested party for the purpose of carrying out comparability analysis? - HELD THAT:- TPO has rejected foreign AE as the tested party for the reason that no reliable data in respect of foreign comparables was available. Thus as far as the foreign party being the least complex entity to the controlled transactions and not owning any valuable intangible or unique assets is concerned, there is no dispute that the foreign entity to the transactions i.e. IDS-A is the least complex and does not own any valuable intangible or unique assets. The only issue on which the acceptance or rejection of the foreign entity as a tested party rests is vis-à-vis availability of the appropriate foreign comparables.
The only reason with the TPO for holding so, which emerges from the above discussion and arguments made before us and on the basis of the facts which were brought to our notice for rejection of the foreign entity as the tested party, is that the data in respect of comparable transactions was not available. At this juncture, we would like to point out that the I.T.A.T. in a number of decisions, pointed out by the Ld.Counsel for the assessee, held that if an assessee wishes to take a foreign entity as a tested party, it can do so provided a relevant data for comparison is either available in the public domain or is furnished to the tax department/administration.
Assessee is engaged in the business of providing software solution and IT enabled service in the areas of litigation support, publishing and content management, engineering services and healthcare support services.
The assessee had given entire detail of the search conducted by it so as to finally arrive at the 11 comparable companies given business description of these companies also and also provided their profits and loss accounts to arrive at the PLI i.e. OP/ OC. Thus, all relevant data had been provided by the assessee to the TPO also. The TPO, we find, besides giving a general statement which is also incorrect, that no description was given regarding activities in which the comparable companies were involved, pointed out no other anomaly was in the data of the comparable companies furnished by the assessee. Therefore, following the decisions of the I.T.A.T. as quoted above, we set aside the rejection of the foreign entity IDSA as the tested party.
For determining the ALP of the international transactions relating to marketing services provided by IDS-A and IDS-UK also, we find, that the assessee had taken the foreign entities as the tested party. These were not rejected by the TPO. Clearly, therefore, there is inconsistency in the stand of the TPO rejecting the selection of foreign entity as a tested party for the purpose of IT enabled services while accepting the same for marketing support services. For this reason also, the rejection of the foreign entities as a tested party needs to be set aside.
As pointed out by the assessee, in the preceding assessment year also the assessee had taken IDS-A as its tested party, which was duly examined by the TPO. Submissions in this regard were also placed before the TPO. TPO in the preceding year had accepted the same and made no adjustment in this regard. Thus, having accepted foreign entity as a tested party in the preceding year ,the Revenue cannot now take a different stand without pointing out any change in facts vis a vis the preceding year.
We hold that the action of the TPO, accepted by the AO and CIT (Appeals), in rejecting the foreign entity in the controlled transaction i.e. IDS-A, as a tested party is wrong and is, therefore, set aside. We may add that with regard to the rejection of the foreign entity as the tested party, we have considered all the arguments raised before us and no other arguments were raised before us. The decision rendered by us is on the context of solely the arguments which were raised before us.
Since we have upheld the treatment of the foreign entity as a tested party and since no other anomaly was pointed out in the arm’s length price determined by the assessee by treating foreign entity as a tested party, the arm’s length price determined by the assessee is treated as correct and adjustment made in this regard by the TPO amounting to ₹ 45,68,000/- is deleted.
TDS u/s 195 - Disallowance u/s 40(a)(ia) - non deduction of TDS on commission, legal and professional charges, marketing and selling expenses and outsourcing and business development expenses - HELD THAT:- Assessee for assessment year 2009-10, with the impugned disallowance of expenses having been made for the reason that the same were taxable in India since they were sourced from India on account of the agreement entered into with the assessee an Indian Company and also on account of the utilization of the services for the benefit of the assessee Indian Company.
In the present case also we find that there is no finding of the lower authorities with regard to the fact that the income to the payees of the said expenses arose or was deemed to arise in India as per the provisions of section 9 of the Act. There is no finding regarding the existence of any business connection, as defined, under section 9(1) nor of any permanent establishment of the payees in India. Moreover in the present case also there is no finding that the payments in question were “fees for technical services”. Therefore the decision laid down in the preceding year will squarely apply to the present case also, following which we delete the disallowance made u/s 40(a(ia).
Non deduction of tax u/s 194I - non deduction of TDS on rent paid - Addition applying the provisions of Section 40a(ia) - HELD THAT:- It is evident from the said lease deeds, which was there even before the Assessing Officer, that there are several co-owners of the properties which have been taken on lease by the assessee and rent paid thereon. The income in such circumstances cannot, therefore, be said to be the income of the recipient of the rent only. When they have received the same only on behalf of other co-owners the rent paid constitutes the income of all the co-owners and the same is to be apportioned among them as per the method prescribed, if any, in the lease agreement or in proportion of their co-ownership and thereafter only if the rental income in the case of any co-owners exceeds the prescribed limit for the purpose of deduction of tax u/s 194I the tax is to be deducted at source.
Restore the matter back to the AO to apportion the rental income in the hands of the co-owners as per legally permissible, determine the rental income attributable to each co-owner and thereafter apply the provisions of section 194(I) of the Act to the same as also the provisions of section 40(a)(ia) of the Act for non deduction of tax, if found in any case.
TDS u/s 192 - addition for non deduction of tax on salaries paid outside India applying the provisions of Section 40a(iii) - HELD THAT:- The income of the non-residents on account of this salary is not deemed to have accrued or arisen in India and, therefore, was not chargeable to tax in India as salary. Thus, in such circumstances, section 192 was not applicable requiring the assessee to deduct tax at source on the said payment of salary and consequently, provisions of section 40(a)(iii) could also not be invoked to disallow the same.
The contention of the Revenue all along we find, has been that section 40(a)(iii) is attracted because the payments have been made outside India to non-residents. Revenue, we find, has picked up only one of the conditions enumerated u/s 40(a)(iii) for making disallowance, choosing to completely ignore the basic condition required to be fulfilled, which is taxability of the said salary in India. Therefore, the disallowance, we hold, has been made on an incorrect interpretation of law. In view of the above, we hold that no disallowance u/s 40(a)(iii) on account of non deduction of tax on salary paid outside India is warranted and the disallowance made is directed to be deleted.
Disallowance of interest made by invoking the provisions of section 36(i)(iii) - HELD THAT:- The facts in the present case, we find are identical to that in assessment year 2009-10, wherein, disallowance has been made on account of investment made by the assessee company in wholly owned subsidiary. Since the ITAT in the preceding year has held the said investment to be for business purposes, being commercially expedient, following the same, we hold the identical investment in the impugned year also to be commercial expedient for the assessee company and having held so, there can be no case for making any disallowance u/s 36(i)(iii) on account of making the aforesaid investment. The disallowance made u/s 36(i)(iii) is therefore, deleted and the order of the CIT(A) on this ground is therefore, set aside.
Addition of account of alleged non declaration of receipts on sale of assets to M/s Aeromatrix Info Solutions Private limited - HELD THAT:- We find that the sale of Catia V5 licence of M/s Aeromatrix Info Solutions Pvt. has been duly reflected in the ledger account of M/s Aeromatrix Info Solutions Pvt., the software account, in the fixed asset chart shown by the assessee and depreciation on account of sale of the said asset has been also duly reversed in the ledger of depreciation. All books of account were produced before the lower authorities and it can, therefore, be safely concluded that all material was placed before the lower authorities to substantiate its claim. The disallowance having been made on account of the fact that the assessee had not reflected the said amount in its books, the same is directed to be deleted in view of our above observations in this regard. - Decided in favour of assessee.
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2017 (3) TMI 1754
Grant of refund - refund allowed subject to the condition that the assessee furnished a bank guarantee for half of the amount - refund denied on the ground that the order of CESTAT could be implemented only on the same terms on which the Supreme Court passed the interim orders in the case arising out of the Gujarat High Court - HELD THAT:- It is true that the order of CESTAT on the basis of which the petitioner became eligible for refund, was passed on the strength of the decision of the Ahmedabad Bench of CESTAT. It is also true that the decision of the Ahmedabad Bench of CESTAT is the subject matter of a special leave petition pending before the Supreme Court.
The department which chose to go into slumber from 30-12-2015 did not even wake up after the order dismissing the application for modifying the final order, passed by the CESTAT on 20-10-2016. In other words, the department has chosen to file an appeal, if what is stated across the Bar is correct, only after the order impugned in the present writ petition. Therefore, the finality has attached to the order of the Tribunal in the case of the petitioner cannot be overcome by this post facto remedial measure.
The respondents are directed to refund the amount within a period of 8 (eight) weeks from the date of receipt of a copy of this order - Petition allowed.
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2017 (3) TMI 1753
Permission for withdrawal of appeal - Oppression and Mismanagement - appellants sought permission to withdraw the appeal to enable the appellants to file a fresh Company Petition under section 241 and 242 of the Companies Act 2013 - HELD THAT:- While we allow the appellants to withdraw the appeal with liberty to file a fresh petition under section 241 and 242 of the Companies Act 2013, if there is any 'Oppression and Mismanagement' taken place after they become the shareholders of the company, we do not express any opinion with regard to the impugned order dated 31st January 2017 whereby the 2nd appellant has been directed to continue as the director.
Appeal disposed off as withdrawn.
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2017 (3) TMI 1752
Rectification of mistake - non admission of additional grounds of appeal - HELD THAT:- We find that as per Order Sheet dated 30/3/2016, there is no mention of additional ground even in the order sought to be rectified. There is no mention of such additional grounds.
As contended by the assessee that these grounds were raised before the Bench. However, the same were not adjudicated. After considering the totality of facts and in the interest of justice, we recall our order [2016 (4) TMI 1355 - ITAT JAIPUR] to the extent of admission of additional grounds. Therefore, the appeal is to be fixed for hearing for admission of additional grounds. It appears that inadvertently, there is no mentioning of additional grounds. Therefore, this is an apparent mistake from the record requires rectification. The application is disposed of as indicated above.
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2017 (3) TMI 1751
Principles of natural justice - cancellation of fair price shop agreement - case of petitioner is that the impugned order is passed in a most arbitrary manner and without considering the reply of the petitioner - HELD THAT:- The appellate authority is under obligation to consider with due care every fact for and against and to record its finding in a manner which may clearly indicate as to whether the facts on which the order was passed have been established and whether the facts so established afford sufficient ground for taking action. Absence of the findings to disclose reasons in an order in the manner indicated above renders the order to be indefensible/unsustainable.
Reason is the heart beat of every conclusion. In the absence of reasons the order becomes lifeless. Non recording of reasons renders the order to be violative of principles of natural justice. Reasons ensures transparency and fairness in decision making. It enables litigant to know reasons for acceptance or rejection of his prayer. Reasons are really linchpin to administration of justice. It is link between the mind of the decision taker and the controversy in question. Thus failure to give reasons amounts to denial of justice.
Perusal of the impugned appellate order further shows that the petitioner specifically argued before the respondent no.3 with references to the evidences on record with respect to certification of stock and distribution, receipt of essential commodities by the complainants as recorded in the sale register bearing signatures of the complainants, non supply of inquiry report and non consideration of the explanation submitted and the evidences filed - The impugned appellate order prima facie indicates failure on the part of the respondent no.3 to discharge his duty.
The impugned order cannot be sustained and is hereby quashed - Matter is remitted back to the respondent no.3 to decide the Appeal afresh, in accordance with law - Petition allowed by way of remand.
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2017 (3) TMI 1750
Sanction of Scheme of Arrangement under sections 391 and 394 of the Companies Act, 1956 - rejection on the ground that the proceedings are liable to be transferred to the National Company Law Tribunal, Chandigarh Bench, Chandigarh, (NCLT) - HELD THAT:- The rights of third parties are not effected by the scheme of arrangement. Nor are they affected by this order. If for any reason they are affected by this order, we have reserved to them the right to seek a modification or a review/recall of this order.
The Regional Director in paragraph-7 of his affidavit requires the appellant to comply with the provisions of the Foreign Exchange Management Act, 1999 (FEMA)and the Reserve Bank of India (RBI). Needless to state that the appellants are bound and liable to comply with all the requirements of law including of the FEMA and RBI.
The scheme of arrangement (Annexure P-1) is sanctioned.
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2017 (3) TMI 1749
Reopening of assessment u/s 147 - Bogus purchases - eligibility of reasons to believe - HELD THAT:- No additions having been made by the Assessing Officer to the total income of the assessee on account of suppression of sales, the very reasons for the initiation of reassessment proceedings had ceased to survive and in our opinion, it was not permissible to the AO to make additions to the total income of the assessee in the reassessments on the issue of bogus purchases, which was not the subject matter of reasons recorded by him for reopening the assessment as held by the Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Limited [2011 (6) TMI 4 - DELHI HIGH COURT] and Jet Airways (I) Limited [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] - Decided in favour of assessee.
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2017 (3) TMI 1748
Royalty receipts - consideration received by the assessee for software licensed / sublicensed - assessee argued that the assessee company sells software to Indian companies for their use and not for resale - CIT-A took the view that software itself is a ‘secret process’ which is used in data processing and in as such the payment is made for using such process and the payment is in the nature of royalty and alternatively also held that software is a scientific equipment and the payment received being for use of such equipment would be construed as royalty - DTAA between India and USA - HELD THAT:- Respectfully following the legal position as determined by Hon’ble Delhi High Court in Infrasoft Ltd. [2013 (11) TMI 1382 - DELHI HIGH COURT] and Reliance Industries Ltd [2016 (6) TMI 96 - ITAT MUMBAI] we are of the opinion that the assessee has transferred the copyrighted article/ material which does not give rise to any royalty income as held by ld CIT(A) in the impugned order.
VARs constituted a PE of the appellant in India - assessee submits that the CIT (A) not adjudicated the ground of appeal raised before him. It was further argued in alternative that M/s Satyam and Compaq are well established company in the field of software services and question of their dependent upon the assessee does not arise - HELD THAT:- CIT(A) has not adjudicate the ground of appeal despite specific ground of appeal raised by assessee. Hence, we deem it appropriate to restore this ground of appeal to the file of ld CIT(A) to decide the issue afresh in accordance with law.
Penalty levied u/s 271(1)(c) - HELD THAT:- We have granted full relief to the assessee as holding that consideration received for software licence/sublicence is not royalty. As in the quantum assessment, the treatment of the income has been reversed; consequently the disallowance in the assessment order is deleted. Thus, the appeal filed by Revenue even on merit left no merit for further consideration. Because, as the order on the basis of which the penalty was levied has been set-aside by us. Even otherwise the penalty was levied by AO on account of different treatment besides claimed by the assessee. It is the settled law that mere disallowance of claim which is based on bonafide belief cannot be a basis for levy of penalty. There is no specific allegation or finding by AO the that assessee has intentionally and deliberately furnished the inaccurate particular or concealed the income. Hence, appeal filed by the Revenue is dismissed.
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2017 (3) TMI 1746
Deduction u/s. 80P - assessee carries on banking and other business in the name of a credit co-operative society - HELD THAT:- The assessee is a registered Cooperative Credit society and is providing facility to its members to deposit, therefore sufficient interest is paid. In addition to that the assessee has also guaranteeing loans/advances in which interest is charged from its members and apart from that the assessee is also getting interest from FDs.
The assessee is not guaranteeing any credit facility to any other persons except the members and this is eligible for deduction u/s 80P of the Act.
Interest income received by the appellant - Income From Other Sources OR Business Income - HELD THAT:- CIT(A) has rightly conclude that the interest has been received either from a Scheduled bank or Co-operative Bank and no interest income has been received by the assessee from its investment in a co-operative society. The Ld. CIT(A) has rightly followed the mandate given by Hon’ble Supreme Court in case of The Totgars Co-operative Sale Society Ltd.[2010 (2) TMI 3 - SUPREME COURT] wherein it was held that the interest received by a co-operative society from investment of its surplus funds is assessable under the head “income from other sources” and deduction u/s 80P is not available in respect of such interest and dividend income. Therefore in the present case the disallowance of deduction u/s 80P was rightly upheld to that extent.
Commission Income - assessment as ‘Business Income’- HELD THAT:- We find that the revenue has not carried out the required verification and the CIT(A) has only mentioned that these income are credited to the profit and loss account of the assessee and it is not connected with the banking/credit giving facilities business, therefore in these circumstances we set aside these grounds to the file of the AO for carrying out detail verification of these grounds. It is needless to mention that Assessing Officer would provide reasonable opportunity of being heard to the assessee. Therefore, these grounds are allowed for statistical purposes.
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2017 (3) TMI 1745
Reasonable cause for non-appearance on the date fixed for hearing - Notice fixing the date of hearing was not received by the assessee due to change of address - HELD THAT:- As gone through the Miscellaneous applications and found that assessee has changed place and notice could not be served at the new address.
We are satisfied with assessee’s reasonable cause for non-appearance on the date fixed for hearing. In the interest of justice, we recall the exparte order of Tribunal dated 23/08/2016 and direct the Registry to issue afresh notice at the new address as stated in the affidavit.
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