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Showing 201 to 220 of 1495 Records
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2016 (6) TMI 1298
Loss on sale of shares - Assessee had debited ‘loss on sale of investments’ which being long term capital gains should not be allowed as business loss - Held that:- AO himself had assessed the income or loss on account of sale under the head ‘profit & gains from business’ instead of ‘income of capital gains’ shown by assessee, which has been followed by assessee consistently. AO has not given any reason except stating that the assessee had shown the said shares as long term investments in the balance sheet.
CIT(A) observed that assessee has been showing said shares as investments in the balance sheet and since the department had altered the nature of income from capital gains to business income, assessee accepted the said decision of the department and has been offering the income under the head ‘business’, though the said shares have been continued to be shown as investments in the balance sheet. Facts have not been different to the earlier A.Ys. 1992-93 & 1993-94, wherein Assessing Officer himself treated the sale of shares as business income/loss. AO cannot keep changing the head of income without bringing new material on record. Therefore, loss on sale of shares was rightly directed to be treated as business loss.
Disallowance of bad debts - Held that:- Since the provision was debited in P&L account last year the same was not debited once again in the P&L account this year. Instead the assessee claimed deduction only in the computation of income for A.Y. 2005-06. Assessee explained necessary entries were passed in the books of account with reference to write off of bad debts. The entries passed by assessee have been verified and found to be correct. So, following the decision of Hon'ble Supreme Court in the case of TRF Ltd. vs CIT [2010 (2) TMI 211 - SUPREME COURT], the addition made on account of bad debts written off was rightly deleted by CIT(A). - Revenue appeal dismissed.
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2016 (6) TMI 1297
Maintainability of appeal - monetary limit - retrospective effect of circular - Held that:- From Clause 10 of circular No.21 of 2015 dated 10.12.2015, it is clear that these instructions are applicable to the pending appeals also and as per clause 3, there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 10,00,000/-. These instructions are operative retrospectively to the pending appeals.
Keeping in view the CBDT Circular No.21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal.
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2016 (6) TMI 1296
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee as ITES provided by the assessee to its Associated Enterprises (AEs) have operating profit cost at 14.36%.thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Section 10A deduction - Held that:- As relying on case of Wipro Ltd. case [2015 (10) TMI 826 - KARNATAKA HIGH COURT] we direct the Assessing Officer to allow claim of deduction under Section 10A without setting off brought forward losses and unabsorbed depreciation.
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2016 (6) TMI 1295
Addition of loan taken from 12 companies - disallowance of interest paid on these loans - Held that:- The addition made by the AO u/s 68 in respect of credits received by the assessee from the twelve Kolkata based companies deleted by the Ld. CIT(A) holding that their identity and creditworthiness and the genuineness of the transactions was established. - Decided against revenue
Reopening of assessment - Held that:- Where transaction itself, on the basis of subsequent information, is found to be bogus transaction, mere disclosure of that transaction at the time of original assessment proceedings cannot be said to be a disclosure of the 'true' and 'full' facts in the case and ITO would have jurisdiction to reopen even concluded assessment in such a case. The case of the assessee is still weaker as no assessment has been made in his case.
The contention of the assessee that the AO had no definite material or information before invoking provisions of sect ion 147 is not tenable. It is an admit ted fact that the original return of the assessee was processed u/s 143(1)(a) only at ministerial staff level and no finding had be en o r e v en can be recorded, by the AO during such processing, about the genuineness of loan transactions constituting the reasons for issue of notice u/s 148. The AO was therefore, fully justified in invoking provisions of section 147, as has been held by the Apex Court in ACIT v Rajesh Jhaveri Stock Brokers P Ltd.(2007 (5) TMI 197 - SUPREME Court) . There is thus absolutely no merit in the assessee's contention challenging the reopening of assessment u/s 147 and issue of notice u/s 148 and the same are found to be validly initiated and in accordance with law. - Decided against assessee
Disallowance of interest - Held that:- The stand alone disallowance of interest without establishing such loans to be unexplained and in-genuine in assessee own case, does not have sanctity and approval of law. - Decided against revenue
Disallowance u/s 14A - Held that:- Interest receipts in this case were much higher than interest paid and since the interest was mainly received on FDR which are required to be made for obtaining overdraft facility, the interest receipts are inextricably linked to interest payments and therefore interest received should be netted off against interest payments. The CIT(A) has given a finding that the investments made by the assessee were made out of own funds and not out of interest bearing borrowed funds. Thus in the peculiar facts of the case, the CIT(A) deleted the disallowance u/s 14A of ₹ 2,59,473/- made in respect of interest paid and restricted the disallowance in respect of expenses to ₹ 19,970/- @ .5% of the average investments. The above findings of the CIT(A) remained uncontroverted - Decided against revenue
Addition of general and RTO expenses and commission and brokerage expenses - Held that:- Assessee has submitted the details of expenses and copy of RTO expenses and general expenses before the CIT(A). The ld. CIT(A) has deleted this disallowance on the ground that when defects are not pointed out in these expenses and when the assessee is a Public Limited Company, there is no reason to disallow the same expenses. Therefore, the ld. CIT(A) has deleted this disallowance. During the course of hearing, the ld. Authorized Representative for the assessee did not point out any contrary evidence against the finding of the CIT(A).- Decided against revenue
Deduction on account of bad debts actually written off in its books of accounts - Held that:- On similar claim of bad debts made by filing the revised return for immediately succeeding year i.e. AY 2011-2012 has been accepted in the assessment proceedings for that year and also considering the legal position, we hold that the CIT(A) has rightly allowed the said claim
Addition on account of conveyance expenses and repair and maintenance expenses - Held that:- AO has not given any specific instance where the expenses are not supported by vouchers or bills, but at the same time, the assessee has also not produced any complete vouchers/bills to prove that the same are completely and properly maintained. The assessee maintained regular books of accounts and are subjected to audit, but personal element in incurring these expenditure have to be ruled out. Therefore, the ld. CIT(A) has restricted to ₹ 25,000/- each for conveyance and repairs & maintenance expenditure. The CIT(A) has partly allowed the appeal. Therefore, our interference is not required.
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2016 (6) TMI 1294
Disallowance of deduction u/s 80P - interest income and dividend income received by the assessee co-operative society on investments made in bank account and shares of Sindhudurg Central Co-operative Bank - Held that:- The issue arising in the present appeal is identical to the issue before Pune Bench of Tribunal in Sindhudurg Zilla Madhyamik Adhyapak Sahakari Patpedhi Maryadit (2014 (9) TMI 1022 - ITAT PUNE) and Sindhudurg District Primary Teachers Co - operative Credit Society Ltd. Vs. ITO (2015 (2) TMI 281 - ITAT PUNE).
The assessee being a credit cooperative society had made investment in a co-operative bank by way of deposits and also shares of Sindhudurg Central Co-operative Bank, which has been held to be co-operative society by co-ordinate Bench of the Tribunal. Following the same parity of reasoning, hold that the assessee is eligible to claim the deduction under section 80P(2)(d) of the Act in respect of both the interest income and dividend income received from Sindhudurg Central Cooperative Bank. - Decided in favour of assessee.
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2016 (6) TMI 1293
TPA - comparable selection - Held that:- Assessee has provided software development services to its Associated Enterprises, thus companies functionality dissimilar with that of assessee need to be deselected from final list.
We direct the TPO to consider the risk adjustment of the margins of comparables for bringing them on par with the assessee.
Nature of expenditure - web site creation expenses - revenue or capital - Held that:- Without going into the controversy of allowable revenue expenditure we are of the view that even if this expenditure is considered as capital in nature, the assessee is entitled for depreciation on the entire expenditure incurred once the work of web site creation is completed. The A.O has already allowed the depreciation for the asst. year 2010-11. Therefore, we uphold the orders of the authorities below treating the said expenditure as capital in nature, however, the assessee may claim depreciation on the entire amount from the year in which the work is completed and the asset has come into existence.
Exclusion of freight charges, telecommunication charges, insurance charges, travelling and financial charges from the export turnover as well as total turnover while computing the deduction u/s. 10A - Held that:- Hon’ble Karnataka High Court in the case of CIT v M/s Tata Elxsi Ltd. & Others (2011 (8) TMI 782 - KARNATAKA HIGH COURT) had held that while computing the exemption u/s 10A, if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded from the total turnover in the denominator.
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2016 (6) TMI 1292
Determination of “head of income” - Treatment of income received/accrued under an agreement - business income or income from other sources - as submitted the appellant has leased the plant and machinery along with the labour, responsibility for repair and maintenance, insurance, compliance with labour law, etc. the same is akin to a “wet lease” and should be regarded as business income - Held that:- Scheme envisaged joint operation of the plant on an irrecoverable lease of eight years in consideration of lease rentals; which has been extended from time to time. There was thus no intention of letting out the plant, building, machinery and licence to anyone. The setup of the business for carrying on the business. Further, when appellant entered the arrangement with Apollo, the intention was not to lease. The intention was to exploit the commercial assets through its expertise and derive income. There is no sale of assets or retrenchment of employees or even surrender of any licenses, registration etc. As per the agreement, it was the responsibility of the assessee to recruit labour for running the plant and meet all the labour law requirement in respect thereof, to purchase fuel and power required for running the plant, ensure the plant is properly insured, maintain the plant in working condition, undertake its repair and maintenance etc. The express so incurred by the appellant for the said responsibilities, were reimbursed by Apollo to it on actual basis. The production now by the appellant is in the name of Apollo and that too, to retain commercial viability in the operations and augment the financial position and at the same time bring about modernization and expansion in the plant.
We are also of the opinion that disclosure in the financial statement as “other income” or there is one segment of the assessee is an irrelevant consideration. It is well settled principle that treatment in books of accounts is not determinative of the nature and taxability of income as held in the case of Tuticorin alkali Chemicals and Fertilizers Ltd. v. CIT (1997 (7) TMI 4 - SUPREME Court)
Thus the income should fall under the head ‘profits and gains of business’ and not from ‘income from other sources’. Accordingly, the ground raised by the assessee is allowed.
Disallowance of expenditure incurred and claimed u/s 37(1) - Held that:- The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the Assessing Officer - CIT(A) has positively held that the business was set up and had commenced. The said finding is accepted. The respondent-assessee, therefore, had to incur expenditure for the business in the form of investment in shares of cement companies and to further expand and consolidate their business. Expenditure had to be also incurred to protect the investment made. The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the Assessing Officer and has also not been doubted by the CIT(A) - Decided in favour of assessee
Disallowance of expenditure incurred towards interest paid on loans raised for investment in subsidiary company - Held that:- Expenditure claimed is eligible business expenditure u/s. 36(1)(iii) of the Act. Therefore, disallowance made and sustained is deleted. Ground raised by the assessee is allowed.
Disallowance of gift of equity shares of Artemis Health Sciences ltd. (‘AHSL), a wholly owned subsidiary company to CEO of AhSl - CIT(A) confirmed the disallowance only on the ground that there is no business income - Held that:- While adjudicating Ground 1 held that income from lease rent of ₹ 25 crores is assessable as business income; and thus exconsequenti the foundation of disallowance ceases to exist and, therefore expenditure is eligible for deduction u/s. 37(1) of the Act. However, we would have ended the matter at that, but, we cannot resist but to state that absence of income alone is not a relevant test for allowability of claim of expenditure either u/s. 37(1) of the Act or even section 57(iii) of the Act.
The setting up of subsidiaries wherein assessee has a 100% controlling interest engaged in healthcare business, tantamount to carrying on business by the assessee company; and, expenditure incurred in the course of the said business is also business expenditure eligible for deduction u/s. 37(1) of the Act irrespective of the income from such business.- Decided in favour of assessee.
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2016 (6) TMI 1291
Processing loss - demand of duty - Held that: - the quantum of loss at job-worker's premises is miniscule and in order to less than 1%. Such losses are reasonable possible in the process like pulverization and conversion of plastic into PP bags - there is no justification for the demand - appeal allowed - decided in favor of appellant.
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2016 (6) TMI 1290
Penalty - the petitioner, purchased an excavator purchased in June 2013 by availing loan facility from the financier M/s.Bajaj Finserv. The petitioner could not remit the said amount and therefore the vehicle remained in the custody of the Department. The Intelligence Officer imposed a penalty of ₹ 7,08470/- after conducting enquiry - Held that: - the vehicle has been in the custody of the Department for quite a long time, it would be appropriate that the demand of penalty is reduced considerably so that it would be possible for the petitioner to get the vehicle released and take custody of the same - penalty reduced to ₹ 1,00,000/- - On remittance of the said amount, the respondent shall release the excavator to the petitioner within a further period of ten days of such remittance - petition allowed in part.
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2016 (6) TMI 1289
Treatment to receipt as rental income - "Income from Business or Profession" as or "Income from House Property" or "income from other sources" - Held that:- As similar view has been taken by Tribunal in assessee’s own case. As the facts and circumstances during the year under consideration are same, respectfully following the orders of Tribunal in assessee’s own case, we direct the AO to treat the income so received as income other sources and to allow the claim of deduction in respect of expenditure incurred for earning the same. The AO is to recompute the income by treating the income so received as “income from other sources”. We direct accordingly.
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2016 (6) TMI 1288
Maintainability of appeal - requirement of pre-deposit - non-production of necessary forms - Held that: - The appellant shall deposit with the Government 20 per cent of the principal tax liability quantified by the Assessing Officer which would exclude interest and penalty latest before 30th September, 2016 - In view of the further fact that the assessee desired to present necessary forms which would have duly established on record, enabling the assessee to claim low rate of tax, the matter placed back before the original assessing authority - appeal disposed off.
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2016 (6) TMI 1287
Validity of assessment order - reversal of input tax credit - whether the input tax credit availed by the petitioner could have been directed to be reversed on the grounds assigned by the respondent? - Held that: - the answer to the question should be 'negative', in the light of the decisions of this Court in the case of Althaf Shoes (P) Ltd. Versus Assistant Commissioner (CT) , Valluvarkottam Assessment Circle, Chennai-6 [2011 (10) TMI 567 - Madras High Court], where it was held that so long as the purchasing dealer has complied with the requirements as given under rule 10(2), the claim of the purchasing dealer cannot, by any length of reasoning, be denied by the Revenue. The mere fact that the Revenue had not made an assessment on the assessee's vendor, per se, cannot stand in the way of the assessing officer considering the claim of the assessee under section 19 of the Tamil Nadu Value Added Tax Act - petition allowed - decided in favor of petitioner.
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2016 (6) TMI 1286
Addition on account of BPO activities - adjustment made in the TP order u/s.92CA(3) - rejection of some of the comparables selected by the assessee - Held that:- Assessee is into international transactions pertaining to BPO services. TPO noted that out of the 11 comparables 7 do not qualify to be treated as comparables since either they were into different functions or had substantial transactions with related parties. The TPO therefore made fresh searches and after considering the various objections of the assessee had retained 7 comparables out of 30 selected by him. Thus, in effect, the TPO took final set of 11 companies as comparables and determined the arithmetic mean at 21.67% and accordingly made adjustment of ₹ 11,92,55,177/- in respect of BPO activity which has come down to ₹ 5,96,21,856/- after the directions of the DRP. They have further held that in absence of any justifiable reasons the final set of 11 comparables as selected by the TPO is upheld.
Exclusion of depreciation for working of PLI - Hed that:- We find the Delhi Bench of the Tribunal in the case of Schefenacker Motherson Ltd. (2009 (6) TMI 125 - ITAT DELHI) while deciding an identical issue has held that for determination of ALP under TNMM assessee was justified in taking profit level indicator of comparable companies as operating cash profits without taking into consideration depreciation. Exclusion of depreciation was justified to eliminate the difference in technology used, age of assets used in production, difference in capacity utilization and different depreciation policies adopted by various companies. TP adjustment has to be made only with respect to transactions with associated enterprises based on ALP and not with respect to total purchases/sales. We, therefore, restore this issue to the file of the AO/TPO for re-computation of the TP adjustment in respect of BPO activity. Ground raised by the assessee is accordingly allowed for statistical purposes.
Addition to the total income on account of interest chargeable on delayed receipts from the associated enterprises following adjustment made in the transfer pricing order u/s.92CA(3) - Held that:- Respectfully following the decision of the Tribunal in assessee’s own case in the immediately preceding assessment year we restore the issue to the file of the AO with a direction to recompute the addition in the light of the direction of the Tribunal. The above ground is accordingly allowed for statistical purposes.
deduction u/s 10A in respect of various eligible undertakings of the Company - Held that:- Since it is the submission of the Ld. Counsel for the assessee that no new undertakings were set up by the assessee in the current year and deduction was allowed in respect of undertakings established upto A.Y. 2005-06, therefore, we restore this issue to the file of the AO who shall verify the records and in case no new undertakings are set up during the impugned assessment year, then following the order of the Tribunal allow deduction u/s.10A in respect of various eligible undertakings of the company. Needless to say, the AO shall give due opportunity of being heard to the assessee. Ground of appeal No.3 by the assessee is accordingly allowed.
Invoking provisions of section 10A(7) read with section 80IA(10) on protective basis - Held that:- We restore the issue to the file of the AO with a direction to verify the records and if under identical circumstances the DRP has decided the issue in favour of the assessee in its own case for A.Yrs. 2010-11 and 2011-12 then to decide the issue in the light of the direction of the DRP. Grounds raised by the assessee are accordingly allowed for statistical purposes.
Claim of the assessee relating to the set off of the losses against the other business profits allowed
Denial of 10A deduction in respect of various undertakings is not justified. Accordingly, the grounds raised by the assessee on this issue are allowed.
Setting off of brought forward loss of NDA (BPO) unit before allowing deduction u/s.10A in respect of profits of the said unit for the current year and thereby restricting the deduction u/s.10A to Rs. Nil - Held that:- Since in the preceding years the matter has been decided against the assessee and assessee is in appeal before the Hon’ble High Court, therefore, in view of judicial precedents the order of the AO on this issue is upheld and the ground raised by the assessee is dismissed.
Denial of 10A deduction - Held that:- The number of technical manpower personnel transferred to the new unit at the end of the financial year does not exceed 50% of the total technical manpower actually engaged in development of Software of IT enabled products in new unit. Since the assessee satisfies the condition as per CBDT Circular No.14/2004 dated 08-10-2014 which has already been reproduced in the preceding paragraphs at Para 59 of this order, therefore, we are of the considered opinion that denial of 10A deduction in respect of various undertakings is not justified. This ground by the assessee is accordingly allowed.
Allowing deduction for ESOP cost charged to the profit and loss account by observing that it is nothing but a notional entry and no cost is actually incurred by the company - Held that:- We find from the documents filed by the Ld. Counsel for the assessee that the DRP in subsequent years, following the decision in the case of Biocon Ltd. (2013 (8) TMI 629 - ITAT BANGALORE), has allowed the claim of ESOP cost. Under these circumstances, we deem it proper to restore the issue to the file of the AO with a direction to verify the records of the subsequent years. In case the same has been allowed either by the DRP or by the AO, then the claim of ESOP cost has to be allowed by him. Needless to say the AO shall give due opportunity of being heard to the assessee while deciding the issue
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2016 (6) TMI 1285
Interest - penalty - Held that: - there were sufficient balance of Cenvat credit in the statutory record maintained by the appellant, which is RG-23A Part-II register - In existence of sufficient balance, there shall not be levy of interest and so also there shall not be levy of penalty on the appellant - appeal allowed.
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2016 (6) TMI 1284
Liability of service tax - construction of residential complex for the use of Government of India - Held that: - There is no dispute that the construction was made on behalf of the President of India which was not a commercial property. That was not even made for identified person for his personal use. That was made residential complex of the BSF and not being constructed for commercial use but meant for the use of the Government of India that is out of the scope of taxation under the Finance Act, 1994 - service not taxable - appeal allowed - decided in favor of appellant.
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2016 (6) TMI 1283
Revision u/s 263 - as per CIT-A order passed by the AO dropping the proceedings u/s 147 appeared to be erroneous and prejudicial to the interests of the Revenue - assessee claimed higher depreciation on the buses @ 30% as against the normal rate of 15% - Held that:- As held in 'Radhey Shyam Agarwal (HUF)' (2009 (3) TMI 649 - ITAT AGRA), the contention of the assessee having been accepted by the AO after due application of mind on the material available, CIT was not justified in invoking the provisions of section 263 regarding this issue. It goes without saying that it is not permissible in law for the Pri. CIT to step into the shoes of the AO and pass fresh assessment order after reassessing the case, as held in 'Ved Parkash Contractor v. CIT' [2015 (11) TMI 859 - ITAT CHANDIGARH] wherein also CIT herein also has reframed the assessment, not leaving any scope for the AO to re-do the assessment, or to pass a fresh assessment order. Therefore, as rightly contended, remanding the matter to the AO is of no consequence.
Then, on merits also, as per 'Balakrishna Transports' (1996 (9) TMI 13 - KERALA High Court), 'Sarojini Transports (P.) Ltd.' (1986 (1) TMI 188 - ITAT MADRAS-A ) the assessee is entitled to a higher claim of depreciation @ 30% and not that @ 15%. - Decided in favour of assessee.
Disallowance u/s 14A - Held that:- The proposition settled in 'DLF Ltd.' (2012 (9) TMI 626 - DELHI HIGH COURT) is that the powers u/s 263 of the Act cannot be invoked for making disallowance u/s 14A of the Act.
While observing so, it was held that it is not mere prejudice to the revenue or a mere erroneous view, which can be revised u/s 263 of the Act and that there should exist the added element of sustainability in the order of the AO, which clothes the CIT (here, the Pri CIT) with jurisdiction to issue notice and proceed to make appropriate order. Before us, nothing is available either in the impugned orders, or by of any other material on record, to suggest that the assessment orders were unsustainable in law. Also as per section 14A(3), where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under the Act, the provisions of section 14A(2) shall not apply - Decided in favour of assessee
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2016 (6) TMI 1282
Transfer Pricing Adjustment - determination of arm’s length price - royalty payment - Held that:- The assessee is importing basically the breeder seeds and with the aid of technical know-how of its AE and assists in further developing seeds at the facilities located in various parts of the country. Thus, to say that there is no benefit to the assessee from such proprietary information, trademarks, technical know-how would not be correct. Even in third party situation, proprietary rights, information and license to use trademarks and know-how is provided or make available then it would not be free of cost. There is always a price which needs to be computed under the principles of “Arm’s Length Price”. Contention of the TPO as well as direction of the DRP that royalty payment has to be treated as “Nil” cannot be justified in the wake of not only the “technical collaboration agreement” but also the actual conduct of the parties and the assessee who has earned huge returns during carrying out its activity by exploiting these intangibles.
The third party data have been rejected on the ground that, the agreement relates to the year 1995, whereas the payment has been made in 2006 by the assessee to its AE. However, we fail to understand if the terms of the agreement are still in force and has not been terminated then how the year of agreement will make a difference. If a similar payment has been made to the third party in this year, then, if other attributes of CUP are fulfilled then same has to be considered for the comparability analysis to benchmark the ALP of the payment. What is required to be seen is, whether the terms and conditions of the agreement with the third party and the terms and conditions of the agreement with the AE are similar or not. If they are similar, then definitely there is a situation of internal CUP, unless some material differences is shown between the two agreements or there is change in the facts from year 1995 to this year or any other criteria of significance. We find that the Tribunal in respect of ‘license manufacturing segment’ has restored back the matter to the file of the TPO for benchmarking the same by using CUP method. On the same principle, we are also in agreement that CUP method should be applied for benchmarking this transaction. Accordingly, we restore this issue to the file of the TPO/AO to examine the terms and conditions of the agreements with the third party and whether such terms are still relevant for the year under consideration and also the terms and conditions entered into by the assessee with its AE.
Deduction of “other income” from the amount of profits eligible for deduction under section 80IB - Held that:- So far as the interest on employee loan is concerned, it cannot be held that same has direct or proximate connection with the business of the industrial undertaking. Moreover, this issue has been decided against by the Tribunal in assessee’s own case as admitted by the Ld. Counsel, therefore, so far as interest on employee loan at ₹ 28,523/-, the same has righty been disallowed by the AO. As regards the ‘other interest income’, no submissions have been made before us, therefore, on this score also we uphold the order of the AO denying the deduction claimed under section 80IB. As regards the ‘sale of scrap’, the Ld. Counsel before us has filed the details of miscellaneous income which is on account of sale of scraps. Since these evidences were not filed before the authorities below, therefore, same needs to be verified by the AO and accordingly, we are setting aside this issue for examining the same.
Set off of losses of 80IB units against the profits of non 80IB units for working out the eligible profits under section 80IB - Held that:- We hold that each undertaking or unit is to be treated as independent and separate unit and it is those industrial undertaking which have a profit or gain are to be considered for computing the deduction. The loss making industrial undertaking would not come into picture at all. Thus respectfully following the aforesaid decision, we allow the claim of the assessee.
Addition on account of closing stock on account of unutilized CENVAT credit - Held that:- if the addition of ₹ 19,00,63,130/- made to the closing stock on account of unutilized CENVAT credit is to be sustained, then corresponding adjustment should be made to the opening stock, purchases and sales and this proposition is covered in favour of the assessee by the order of the Tribunal in the assessee’s own case for the AY 2005-06. Thus, respectfully following the aforesaid decision, which in turn is based on the decision of Hon’ble Bombay High Court in the case of Mahalaxmi Glass Works Pvt. Ltd (2009 (4) TMI 182 - BOMBAY HIGH COURT ), we decide this issue accordingly and restore the matter to the file of the AO with similar direction.
Disallowance of site restoration expenses - Held that:- Here the case of the assessee before us is that it has itself disallowed the provision and now it is being claimed on actual basis. We accept this contention that once it is undisputed fact that the assessee’s claim has been disallowed in the earlier years then, actual expenditure incurred in this year has to be allowed. Before us, the Ld. Counsel has also pointed out that, in AY 2009- 10, a similar expense on actual basis has been allowed. Accordingly, we direct the AO to allow the actual expenditure incurred during this year on site restoration cost. Accordingly, ground no. 5 is treated as allowed.
Non-granting of TDS credit/short-deduction of TDS - Held that:- We direct the AO to verify the contention of the assessee and grant the credit after verification.
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2016 (6) TMI 1281
Classification of services - monetary amount involved in the appeal - Held that: - this appeal has been dismissed under Litigation Policy as the service tax involved is less than ₹ 10,00,000/- (Rupees Ten Lakhs only) and by following the instructions F.No. 390/Misc./163/2010-JC dated 17.12.2015 as reported vide letter dated 01.01.2016 - dismissal of a case under Litigation Policy will not be a precedent for future cases - application for restoration of appeal dismissed.
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2016 (6) TMI 1280
Deduction u/s 10A computation - Held that:- Both sides that these issues are covered in favour of the assessee by the judgment of the Hon'ble Karnataka High Court rendered in the case of M/s. Tata Elxi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT) held that the total turnover is sum total of export turnover and domestic turnover and therefore, if any amount is reduced from the export turnover, the total turnover is also to be reduced by the same amount as a consequence thereof. Under these facts, we find no reason to interfere in the order of the ld. CIT(A) on this issue.
Exclusion of comparables - Held that:- Since the present assessee company is only providing software development services to the AE, thus companies functinally dissimlar with that of assessee need to be deselected. After exclusion of 5 companies, arithmetic mean of the remaining 6 companies (comparables) will be only 14.02% as against PLI of the tested party i.e. the assessee company 17.63% and as a result No. TP adjustment is called for after exclusion of these 5 comparables and therefore, we do not go into the claim of the assessee regarding adoption of correct operating profit of two companies i.e. M/s. Sasken Communication and M/s. Larsen & Toubro Ltd., because the same is of academic interest only.
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2016 (6) TMI 1279
Exemption claimed u/s 54EC - Capital gain not to be charged on investment in certain bonds - Held that:- For the purpose of section 54EC, the date of investment is to be regarded as the dates of investment/the payment received by the authorized bank. It is noted that section 54EC of the Act has no restriction if the specified investment of ₹ 50 lakh is made in two different financial years.
The exemption u/s 54EC is available to an assessee, if the long term capital gains, earned by the assessee, is invested in the specified long term asset and such investment is made within six months from the date of transfer of such long term asset. As per the proviso to section 54EC, the investment in any Financial Year is restricted to ₹ 50 lakh and since the assessee has made the investment of ₹ 50 lakh each in different two Financial Years but within six month from the date of transfer of the asset. - Decided in favour of assessee.
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9911796707
