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Showing 201 to 220 of 2364 Records
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2018 (7) TMI 2168
Deduction u/s 10AA on foreign exchange and forward contract gain - forward contract gain and foreign exchange gain not considered as income from the business of the export which is eligible for deduction under section 10 AA - HELD THAT:- In the case of CIT v. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] has ruled that Gain from fluctuation of foreign exchange is directly related with the export activities and should be considered as income derived from export in the year in which the export took place for the purpose of deduction u/s 10A.
Exchange rate fluctuation for claiming deduction U/s 10AA of the Act is income of the business as the exchange rate fluctuation are resultant from realization of export sale proceeds as per the export invoices and as per the definition of export turnover, the consideration received in respect of the exports, for example, total amount realized for sale invoices shall form part of export turnover. Therefore, the total turnover is denominator, which sale also includes the effect of foreign exchange fluctuation. Therefore, such inclusion of foreign exchange fluctuation in the profits shall qualify for deduction U/s 10AA of the Act.
Telecommunication expenses also be reduced from the total turnover for the purpose of computing deduction under section 10 AA - CIT – A relying upon the decision of the Hon’ble Delhi High Court in the case of Gen pact India [2011 (11) TMI 119 - DELHI HIGH COURT] wherein it has been held that there should be Uniformity in the ingredients of both the numerator and denominator in the formula for computation of deduction under section 10 A of the income tax act. Therefore, he directed the AO to include the telecommunication expenses in the export turnover if it is included in the total turnover for computing deduction under section 10 AA of the act. As the Ld. CIT – A has decided the issue following the decision of the Hon’ble Delhi High Court we find no infirmity in his order. Further identical view has also been taken by the Hon’ble Karnataka High Court in in case of Dell international services India private limited [2012 (5) TMI 388 - KARNATAKA HIGH COURT] and Samsung electronics Co Ltd [2011 (11) TMI 429 - KARNATAKA HIGH COURT]- Revenue dismissed.
Allowing migration/on the job training expenses from the total turnover for the purpose of computing deduction under section 10 AA - CIT-A rejected the finding of the Ld. assessing officer holding that the Hon’ble Delhi High Court in Karnataka High Court ..has taken a view that numerator and denominator should be same. The above view is the correct view otherwise the profit eligible for deduction will give a distorted picture. The detailed finding of been given by the Ld. CIT – A in para No. 6 of his order. We do not find any infirmity in the order of the Ld. CIT – A and therefore the ground No. 3 of the appeal of the revenue is dismissed.
TP Adjustment - interest at the rate of LIBOR +1.5% instead of 16% rate of interest charged on the delayed payment from the associated enterprises - HELD THAT:- CIT appeal who reduced the addition holding that interest shall be chargeable at the rate of LIBOR +1.5% instead of 16% computed by the Ld. transfer pricing officer. The Ld. CIT – A while reducing the interest component has relied upon the decision of the coordinate bench [2013 (12) TMI 1535 - ITAT MUMBAI] for assessment year 2008 – 09 wherein the coordinate bench has held that notional interest at the rate of LIBOR +1.5% should be charged on the delayed payments the associated enterprise. As the Ld. CIT – A has followed the decision of the coordinate bench on the similar facts and circumstances where the interest component was computed on the delayed payment of charges by the associated enterprise. In view of this we do not find any infirmity in the order of the Ld. CIT – A and Ld. Departmental representative also could not show us that the interest computation mechanism directed by the Ld. CIT – A is not appropriate - Appeal of revenue dismissed.
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2018 (7) TMI 2167
Addition u/s 68 - difference in opening balance to the extent not explained by the assessee - CIT-A deleted the addition - HELD THAT:- Assessee could change any figures given in table given to satisfy the requirement of capital as on 01.04.2011, and argue that opening balance as on 01.04.2011 were from balances available with it on 01.04.2003, and hence could not be considered for addition in the impugned assessment year. If such claim is allowed, any amount shown by the assessee as opening balance can be claimed as coming out from balances of the earlier years.
Despite this lacuna in the claim of the assessee, AO accepted what all the assessee could even remotely substantiate in such opening balance. AO, in our opinion was more than fair in accepting every explanation given by the assessee except for its claim of opening capital of ₹ 1,02,06,929/- as on 01.04.2003 and deficit due to non reflection of drawings and sources for tax payments in the earlier years. Assessee was duty bound to explain every rupee out of the opening capital balance of ₹ 7,46,48,917/- shown by it as on 01.04.2011.
Especially so since it had shown ‘’Nil’’ amount as its capital in the Balance sheet as on 31.03.2011 forming part of its return for assessment year 2011-12. Explanation of the assessee that the sum of ₹ 1,02,06,929/- represented cash in hand, value of food grain stock and value of agricultural produce was not substantiated before the ld. Assessing Officer, through any evidence. That apart, agricultural income shown by the assessee himself was in the vicinity of ₹ 1,00,000/- to ₹ 1,25,000/- per year, and the probability of accumulating a huge amount from such agricultural income was negligible.
Drawings and taxes in the earlier years - It is an admitted position that such drawings and taxes do not appear in the table furnished by the assessee reproduced by us at para 3 above - assessee had no source for his personal expenses and taxes paid. Hence, we have to consider that such amounts had gone out of the income of the respective years. Then without doubt, opening capital as on 01.04.2011, would remain unexplained to the extent of such aggregate drawings and taxes.
Commissioner of Income Tax (Appeals) in our opinion fell in error in considering the Balance sheet filed by the assessee alongwith its own return as not factual and incorrect one. An assessee cannot be allowed to approbate and reprobate. It cannot say that its own Balance sheet did not reflect correct state of affairs.
Just by claiming that the capital was represented by assets, which were acquired during earlier years, in our opinion an assessee cannot escape from its onus of explaining the source of such capital. In the facts and circumstances, we are of the opinion that ld. Assessing Officer was justified in making the addition for unexplained capital, drawings and taxes paid. Judgment of Hon’ble Jurisdictional High Court in the case of C. Packirisamy [2008 (12) TMI 190 - MADRAS HIGH COURT] does enable an Assessing Officer to make an addition for deficit in opening capital. The additions made by the ld. Assessing Officer, are all reinstated. Order of the ld. Commissioner of Income Tax (Appeals) is set aside. Appeal of the Revenue is allowed.
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2018 (7) TMI 2166
Computation of Deduction u/s 10A - deduction of expenditure incurred for ‘Export Turn Over’ is also required to be deducted from ‘Total Turn Over’ for the purpose of computing the deduction u/s.10A - HELD THAT:- Deduction of expenditure incurred for ‘Export Turn Over’ is also required to be deducted from ‘Total Turn Over’ for the purpose of computing the deduction u/s.10A of the Act, the controversy is no longer res integra and is covered by the decision of the Division Bench of this Court in the case of M/s.Tata Elxsi Ltd., vs. Asst. Commissioner of Income Tax, decided on 20.10.2015 since reported in [2015 (10) TMI 634 - KARNATAKA HIGH COURT], which has been affirmed in the case of Commissioner of Income-tax, Central – III vs. HCL Technologies Ltd.,. [2018 (5) TMI 357 - SUPREME COURT].
If the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature.
Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well/
TP Adjustment - comparability - HELD THAT:- The controversy involved herein is no more res integra in view of the decision of M/s.Softbrands India Pvt. Ltd [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] wherein held appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law.
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2018 (7) TMI 2165
Deposit of permission fees for transfer/sub-lease of the sub-leasehold of the writ petitioner - change of name by Company - HELD THAT:- Both Annexures "P/20" and "P/27" which treat a due change in the name of a company incorporated under the Companies Act, 1956 to be a creation of a new entity or at the very least, a reason for lifting the corporate identity to see the manner in which the shareholders have changed, are bad in law and arbitrary and illegal and contrary to the law of the land and thus public policy and show non-application of mind to the matters of record, and they are so unreasonable that no reasonable man on the face of the same facts could have come to the same conclusion. Thus, they are also perverse within the meaning of law. They are therefore quashed. Furthermore, any attempt to treat the writ petitioner under its old name and the changed name as two different entities would be bad in law and wholly without jurisdiction and in violation of Section 23 of the Companies Act, 1956 as interpreted authoritatively and must be struck down and quashed. As a consequence, any demand made by the respondents or any of them or those claiming there under to obtain permission fees for any fresh deed of rectification to change the name of the sub-lessee in the deed of sublease or rectification deed of 2005 or 2012 to the changed name of the writ petitioner or as processing fees for mutation of the said changed name, must be held to be equally without jurisdiction and impermissible on the part of the respondents or any of them.
The respondents and each of them, including the respondents No. 1, 2, 3, 4 and 5 and each of them, are commanded to record the change of name of BNKe Solutions Private Limited to the changed name of the writ petitioner, Gopi Vallabh Solutions Private Limited (the petitioner No. 1) without payment of any permission fee, as demanded - Petition allowed.
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2018 (7) TMI 2164
Penalty u/s 271(1)(c) - disallowance of provision for excise duty payable amounting to ₹ 30,00,000/- by invocation of section 43B - HELD THAT:- We find ourselves in agreement with the submission of the learned counsel of the assessee that all the necessary particulars were duly disclosed by the assessee - There is no case of concealment of income or furnishing of inaccurate particulars of income. In this regard, the case laws relied upon by the Commissioner of Income Tax (Appeal) and as canvassed by the learned counsel of the assessee are germane and support the case of the assessee.
As held in the case of Reliance Petroproducts Pvt. Ltd.. [2010 (3) TMI 80 - SUPREME COURT], the disallowance of a claim made by the assessee cannot itself give rise to levy of penalty under section 271(1)(c) of the Act. Accordingly, in the background of aforesaid discussion and precedent we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals). Accordingly, we uphold the same. Appeal filed by the Revenue stands dismissed
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2018 (7) TMI 2163
No appearance by assessee - Rectification application u/s 254 - HELD THAT:- As noticed that assessee has failed to make any compliance to the number of notice of hearing given as per the address provided by the assessee - assessee has neither intimated any change of address of communication nor filed any adjournment application.
Assessee has filed this Miscellaneous Application against the above cited order. In this respect we find that w.e.f. from 1.6.2016 the time limit for filing application for rectifying any mistake apparent from the record is at any time within six month from the end of the month in which the order was passed. However, the assess has filed the Miscellaneous Application dated 22/05/2017 beyond the time limit prescribed in the act. After considering the above facts and the clear provision of section 254(2) of the act we do not find any merit in the request of the assessee for condonation of delay in filing the above cited Miscellaneous Application. M.A. of Assessee is dismissed.
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2018 (7) TMI 2162
Allowance of business expenditure u/s. 37 incurred on foreign tour of wife of the Director of the Company,100% deduction u/s.80IA specifically when the assessee company itself and claimed deduction @ 30% u/s. 80IA, Computation of Minimum Alternate Taxation (MAT) u/s 115JA,Cancelling the rectification order under Section 154 and deleting the interest levied u/s.234C by ITA, Validity of revised return - justification of holding that the revised return u/s 139(5) was a valid return, Addition account of downward impact of Retention Price Subsidy,Addition in respect of fees paid to a consultant for drafting the shareholders agreement, Addition made on account of purchase of software being capital in nature, Depreciation on catalyst not allowable under Section 32 - Accrual of income, MAT computation - AO jurisdiction, Allowable business expenditure , Addition u/s 40A - HELD THAT: - Delay condoned. Issue notice.
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2018 (7) TMI 2161
Bogus LTCG - companies in which the investment was made were bogus - disallowance made on account of legal expenses relating to bogus share transaction - HELD THAT:- As decided in Commissioner of Income Tax vs. Smt. Pooja Agarwal [2017 (9) TMI 1104 - RAJASTHAN HIGH COURT] AO has failed to counter the objections raised by the appellant during the assessment proceedings. Simply mentioning that these findings are in the appraisal report and appraisal report is made by the Investing Wing after considering all the material facts available on record does not help much. The AO has failed to prove through any independent inquiry or relying on some material that the transactions made by the appellant through share broker were non-genuine or there was any adverse mention about the transaction in question .
Simply because in the sham transactions bank a/c were opened and the appellant has also received short term capital gain in his account with that bank does not establish that the transaction made by the appellant were non genuine - denying the claim of short term capital gain made by the appellant before the AO is not approved. The AO is therefore, directed to accept claim of short term capital gain as shown by the appellant - Decided in favour of the assessee
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2018 (7) TMI 2160
Computation of deduction u/s 10AA - expenses and foreign exchange loss reduced from the Export Turnover has to be reduced from the Total Turnover - HELD THAT:- In the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that charges/expenses relating to telecommunication, insurance charges and foreign exchange loss should be excluded both from export turnover and total turnover while computing deduction u/s.10A of the Act i.e., whatever is removed from the numerator should also be excluded from the denominator while working total turnover and export turnover for allowing deduction u/s.10A. The aforesaid decision of the jurisdictional High Court has been upheld in the case of CIT v. HCL Technologies Ltd.. [2018 (5) TMI 357 - SUPREME COURT]. The telecommunication charges should be excluded both from the export turnover as well as total turnover while computing deduction u/s.10AA of the Act.
TP Adjustment - comparable selection - substantial question of law - HELD THAT:- Whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise toany substantial question of law.
The present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed.
The same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where the Tribunal giving its own reasons and findings has found certain comparables to be good comparables to arrive at an ‘Arm’s Length Price’ in the case of the assessees with which the assessees may not be satisfied and have filed such appeals before this Court. Therefore we clarify that mere dissatisfaction with the findings of facts arrived at by the learned Tribunal is not at all a sufficient reason to invoke Section 260-A of the Act before this Court.
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2018 (7) TMI 2159
Disallowance of write-off (Advances paid) - CIT(A) held that write off the aforesaid rental advance is permissible and allowed the assessee’s claim - assessee’s contention is that the said premises at Mohali was taken on lease to carry on the existing business of the assessee and therefore the payment of rental advance by it, in this regard, was in the normal course of and incidental to the conduct of its business activity - HELD THAT:- The assessee is in the business of running stores and renting out premises in this regard is part of its normal business activity. Therefore, in our considered view, the impugned transaction is intrinsically linked and identical to the assessee’s core business activity. In this view of the matter, we are of the opinion that the ld CIT(A) has rightly held that the write off of rental advance paid is in the realm of revenue expenditure and allowable as deduction. We, therefore, uphold the decision of the ld CIT(A) on this issue and consequently dismiss ground No.2 raised by Revenue.
TDS u/s 194H - Disallowance of Bank Charges for nondeduction of tax at source u/s 40(a)(ia) - HELD THAT:- We find that the co-ordinate bench of this Tribunal in the case of Tata Teleservices Ltd.[2013 (1) TMI 480 - ITAT BANGALORE] has examined this issue in all its facets and concluded that the payment to banks on account of utilization of credit card facilities would be in the nature of bank charges and not in the nature of commission within the meaning of sec. 194H - DR for revenue has not brought on record any details to controvert the facts of the case, as laid out above, OR any judicial decision contrary to that cited by the assessee. In this view of the matter, we are of considered opinion that the ld CIT(A) was right in placing reliance on the cited case (Supra) and in holding that the collection charges by the bank for services rendered are in the nature of bank charges and not commission and hence was not liable for TDS thereon u/s 194H - Decided in favour of assessee.
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2018 (7) TMI 2158
Liquidation of Company - absence of any viable ‘Resolution Plan’ - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Appellate Tribunal held that all the ‘Resolution Plans’ were taken into consideration by the ‘Committee of Creditors’. However, in absence of any viable ‘Resolution Plan’ and due to paucity of time they recommended for liquidation of the Company.
Viability or feasibility of ‘Resolution Plan’ - HELD THAT:- The Adjudicating Authority or this Appellate Tribunal cannot sit in appeal over the decision of the ‘Committee of Creditors’. They are the experts to find out the viability and the feasibility of a plan and the matrix. As the aforesaid factors are technical in nature which can be determined by experts like the ‘Financial Creditors’, we are not inclined to sit in appeal over the decision of the ‘Committee of Creditors’ to find out whether one or other ‘Resolution Plan’ is viable and feasible or not.
Appeal dismissed.
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2018 (7) TMI 2157
Liquidation of Corporate Debtor - no viable Resolution Plan placed on record - HELD THAT:- Today, learned counsel for the Appellant reiterated the arguments as was made in the earlier date that there were ‘Resolution Plans’ though there is nothing on the record in support of such arguments. Even if it is presumed that there were some other place but if they were not in accordance with Section 30(2) were not to be placed before the ‘Committee of Creditors’. In fact, the ‘Resolution Plans’ were taken into consideration but the ‘Committee of Creditors’ held that there is no viable ‘Resolution Plan’. In this situation, the ‘Committee of Creditors was not required to request for more time than 180 days. We find that in absence of any viable plan, the Adjudicating Authority has rightly ordered for liquidation of the ‘Corporate Debtor’.
Appeal dismissed.
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2018 (7) TMI 2156
Validity of repeated imposition of police order Under Section 144 of Code of Criminal Procedure - Ban imposed by the Assistant Commissioner of Police, Sub-Division, Parliament Street, New Delhi District prohibiting various activities without written permission in the areas known as Parliament House, North and South Block, Central Vista Lawns together with its surrounding localities and areas - It is the grievance of the Petitioner that though a particular order passed Under Section 144 of the Code of Criminal Procedure remains in force for a period of 60 days, simultaneously on the expiry of the said period of 60 days another order of identical nature is passed thereby banning the holding of public meetings, peaceful assembly and peaceful demonstrations by the public at large.
HELD THAT:- The right to protest is recognised as a fundamental right under the Constitution. This right is crucial in a democracy which rests on participation of an informed citizenry in governance. This right is also crucial since it strengthens representative democracy by enabling direct participation in public affairs where individuals and groups are able to express dissent and grievances, expose the flaws in governance and demand accountability from State authorities as well a powerful entities. This right is crucial in a vibrant democracy like India but more so in the Indian context to aid in the assertion of the rights of the marginalised and poorly represented minorities.
It can be deciphered from the provisions of Articles 19(2) and (3) that exercise of right to speech conferred in Clause (a) and right to assemble peaceably and without arms in Clause (b) is made subject to reasonable restrictions which can be imposed, inter alia, in the interests of sovereignty and integrity of India or public order. This legal position is also accepted by all the parties.
Whether total ban of demonstrations etc. at Jantar Mantar road amounts to violation of the rights of the protestors of the Constitution or this would amount to a reasonable restriction in the interest of 'public order'? - HELD THAT:- There would be also an incidental and interrelated issue, namely, whether the manner in which the demonstrations etc. are held at Jantar Mantar, they violate the fundamental right of the residents guaranteed Under Article 21 of the Constitution. If the answer is in the affirmative, it would raise another issue, namely, balancing of the two rights. The right of the protestors Under Article 19(1)(a) and 19(1)(b) of the Constitution and the rights of the residents Under Article 21 of the Constitution, as both the rights are fundamental rights.
Thus, it would be pertinent to point out that there may be situations where conflict may arise between two fundamental rights. Situation can be conflict on inter fundamental rights, intra fundamental rights and, in certain peculiar circumstances, in respect of some person one fundamental right enjoyed by him may come in conflict with the other fundamental right guaranteed to him. In all such situations, the Court has to examine as to where lies the larger public interest while balancing the two conflicting rights. It is the paramount collective interest which would ultimately prevail.
Undoubtedly, right of people to hold peaceful protests and demonstrations etc. is a fundamental right guaranteed Under Articles 19(1)(a) and 19(1)(b) of the Constitution. The question is as to whether disturbances etc. caused by it to the residents, as mentioned in detail by the NGT, is a larger public interest which outweighs the rights of protestors to hold demonstrations at Jantar Mantar road and, therefore, amounts to reasonable restriction in curbing such demonstrations. Here, we agree with the detailed reasoning given by the NGT that holding of demonstrations in the way it has been happening is causing serious discomfort and harassment to the residents - the pathetic conditions which were caused as a result of the processions, demonstrations and agitations etc. at the Jantar Mantar were primarily because of the reason that authorities did not take necessary measures to regulate the same. Had adequate and sufficient steps were taken by the authorities to ensure that such dharnas and demonstrations are held within their bounds, it would have balanced the rights of protestors as well as the residents.
In the first instance, what needs to be noted is that a portion of Ramlila Maidan has been earmarked for such demonstrations etc. Therefore, that space is already available. One of the argument raised by the Petitioner in the writ petition and Appellants in the appeal is that Ramlila Maidan is far away from that portion of New Delhi area where there is a concentration of 'power' and, therefore, holding protests and demonstration at a far place in Ramlila Maidan would have no impact or very little effect. It was stressed that the purpose of holding such demonstrations and raising slogans is that they reach concerned persons for whom these are meant. This may be correct. However, it is also to be borne in mind that we are living in an era of technology where a concerned voice by a group of persons can reach the right quarters by numerous means. Electronic and print media play a pivotal role. Then, we have social media and various applications like 'WatsApp', 'Twitter', 'Instagram' etc. which take no time in spreading such events. Secondly, though holding protests and demonstrations is an accepted right, at the same time, nobody can claim that I have a right to hold demonstration at one particular area only. While regulating such demonstrations in public interest, particular areas can be earmarked. On the other hand, it is also to be acknowledged that Ramlila Maidan may not be sufficient to cater to this requirement. Again, this place in old Delhi is a part of very congested area and it has its own limitations when it comes to using this area for such purposes.
The Commissioner of Police, New Delhi in consultation with other concerned agencies, is directed to devise a proper mechanism for limited use of the area for such purposes but to ensure that demonstrations, etc. are regulated in such a manner that these do not cause any disturbance to the residents of Jantar Mantar road or the offices situated there - The Petitioner has successfully demonstrated that it is their fundamental right Under Articles 19(1)(a) and 19(1)(b) of the Constitution. At the same time, it is also not denied that there can be reasonable restrictions on exercise of this right in larger public interest. The Respondents have also highlighted in equal measure the sensitivity of this area because of its proximity to the Parliament House, North and South Blocks and other Central Government offices, including frequent visits of Heads of foreign States and other such factors. The Respondents are also justified in pointing out that alarmingly large number of requests for holding demonstrations at this place are made. Further, intelligence reports reveal that some of such demonstrations, if allowed, may cause serious law and order situation.
The orders issued Under Section 144 prohibit certain activities in the nature of demonstrations etc. 'without permission', meaning thereby permission can be granted in certain cases. There can, therefore, be proper guidelines laying down the parameters under which permission can be granted in the Boat Club area. It can be a very restrictive and limited use, because of the sensitivities pointed out by the Respondents and also keeping in mind that Ramlila Maidan is available and Jantar Mantar Road in a regulated manner shall be available as well, in a couple of months. Thus, the proposed guidelines may include the provisions for regulating the numbers of persons intending to participate in such demonstrations, prescribing the minimum distance from the Parliament House, North and South Blocks, Supreme Court, residences of dignitaries etc. within which no such demonstrations would be allowed.
The Commissioner of Police, New Delhi, directed to undertake this exercise, in consultation with other authorities, within two months from today - petition disposed off.
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2018 (7) TMI 2155
Money Laundering - proceeds of crime - gist of the allegations against the petitioner is that the petitioner while serving as a Bank Manager granted loan to various persons out of which the petitioner took commission and laundered the money/proceeds of crime - Section 45 of PMLA - HELD THAT:- Provisions of Section 45 of the PMLA, as they exist on date, provide that a person may be released on bail or on his own bond if bail applicant is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money laundering a sum of less than one crore rupees - Sub Section (2) of Section 45 of the PMLA further provides that limitation on granting of bail specified in Sub Section(1) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail - Inversely, the provisions of Section 45 of the PMLA provide that the persons not falling in the above noted categories would not be entitled to be released on bail.
An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. A presumably innocent person must have his freedom to enable him to establish his innocence. There cannot be an inexorable formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling bail.
The petitioner is facing proceedings at the instance of Enforcement Directorate in view of case registered by Central Bureau of Investigation (CBI). In the CBI case also, the petitioner remained in custody from 4.7.2011 till 24.2.2012. The petitioner has been on bail in the CBI case. The CBI case formulates the basis for the Enforcement Directorate to proceed against the petitioner - We have also taken notice of the past conduct of the petitioner. No material has been placed before us to indicate that the petitioner has tried to influence the investigation by way of tampering with the evidence, influencing the witnesses or manipulating the records or overawing any authority or person.
We cannot lose sight of the punishment provided under the PMLA. The punishment provided in the case of the petitioner is to be not less than three years but may extend upto seven years. The petitioner, at the cost of repetition, has already been in custody for nearly two years and seven months - Considering the spirit of the law guiding the granting or rejecting the application for bail, we are of the considered opinion that the petitioner is entitled to the grant of bail.
Bail application allowed.
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2018 (7) TMI 2154
Disallowance u/s 35D being ROC fees for increasing authorized Capital, which is a capital expenditure - HELD THAT:- Undisputedly, ROC expenses incurred by assessee is in respect of increase in authorised share capital. This issue has attained finality with the decision of Hon’ble Supreme Court in case of Punjab State Industrial Development Corporation Ltd. [1996 (12) TMI 6 - SUPREME COURT] and Brooke Bond India Ltd. [2004 (2) TMI 32 - CALCUTTA HIGH COURT] - Accordingly this ground raised by Revenue stands allowed.
Disallowance of car depreciation on personal car of Sh. Rajinder Kalra - HELD THAT:- No doubt that assessee is eligible to claim of depreciation on vehicle, though purchased in the name of Director which must be proved to have been used exclusively for the purposes of business. In the present case assessee has not provided any Log Book maintained to establish that the vehicle was used during the relevant F.Y. for the purposes of business to be eligible for depreciation. Ld.CIT(A) has not called for/verified any such details. Further a very categorical observation by Ld.AO regarding the date of purchase of vehicle being 31.03.2009 establishes that vehicle could not have been used during the relevant F.Y. This very fact has been ignored by Ld.CIT(A). Assessee has also not proved before Ld.CIT(A) the utilization of vehicle during the relevant F.Y. for justifying the claim of depreciation. We, therefore, reverse the findings of Ld.CIT(A) which is not based upon the facts of the present case.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) restricted disallowance u/s 14A r.w. Rule 8D at ₹ 25,000/- without any basis. We direct Ld.AO to re-compute disallowance u/s 14A r.w. Rule 8D having regard to various decisions of Hon’ble Delhi High Court in the case of CIT vs. Holecim India P.Ltd. HOLCIM INDIA P. LTD. [2014 (9) TMI 434 - DELHI HIGH COURT] as well as the decision of Apex Court in the case of Maxapp Investment Ltd.[2018 (3) TMI 805 - SUPREME COURT].
Addition being loss on share trading and termed as speculation loss - HELD THAT:- Assessee admits to the fact that trading in shares was undertaken by assessee during the year under consideration for the first time and it has been able to show that it was an investment company.
Explanation to Sec.73 is attracted the moment any assessee does not fall within the excluded categories stated therein and such assessee shall be deemed to be carrying on speculation business to that extent for the purposes of Sec.73. The application of the said Explanation has to be considered as a whole and not in part. The Explanation has the import of treating the transaction of purchase and sale of shares which otherwise is not of speculative nature, deemed to be a speculation business. Therefore, to interpret that the said Explanation applies only to a case where there is a speculation business in terms of Explanation 2 to Sec.28 is not mandated by law. The deeming fiction contained in Explanation to Sec.73 is in relation to the entire activity of purchase and sale of shares whether or not they were effected by actual delivery.
We disagree with the observations of Ld.CIT(A) that loss accrued to assessee could be set off against other business income.
Addition on diminution of value of property as the properties were held as capital assets and during the year it was converted to stock in trade only to set off the profit of paper business - HELD THAT:- On perusal of order passed by Ld.CIT(A), it is observed that Ld.CIT(A) has not taken into consideration the manner in which these properties have been treated by assessee in the past. It is observed that ld.CIT(A) has not called for any details regarding the value of the properties as on the date of conversion in order to ascertain the actual loss, if any, post conversion of these properties into stock-in-trade. We, therefore, direct Ld.AO to call for relevant details from assessee and verify the same as per law. Assessee shall furnish all requisite details of conversion of properties as stock-in-trade. Ld.AO while considering the claim of assessee shall also take into consideration the surrender made by assessee during the survey proceedings.
Unaccounted cash transactions - transactions contained in slip pad marked as an annexure A-18, A19, A-32, A-33 treated as transaction made out of unaccounted cash - HELD THAT:- Peak of all transactions amounting to ₹ 1,93,66,043/- has not been explained by assessee transaction-wise. Ld.AO categorically mentioned that no money was in rotation. In fact ld.AO observes that assessee was not at all in money lending activity, as has been observed by Ld. CIT(A). Merely accepting bald statements of assessee without any supportive evidences cannot be accepted.
It is observed that assessee has not been able to substantiate generation of cash, neither during assessment stage nor before Ld.CIT(A) , because of which surrender was made during survey proceedings.We direct Ld.AO to compute peak of entries in the slip pads seized containing details of cash transactions.
Additions are based on seized documents - HELD THAT:- We do not find any infirmity in Ld. AO in making this addition as nothing else has been submitted by assessee before Ld. CIT (A) which would require any further verification.
Addition on account of unexplained expenditure - HELD THAT:- Assessee has not discharged its onus of proving these documents to be dumb documents. Ld.AO is directed to investigate and enquire from the books of accounts of the assessee regarding the regular customers of assessee and transactions written off in respect of the same. Assessee shall assist Ld.AO in order to verify the relevant details by providing necessary information/producing evidences in support of its write-off.
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2018 (7) TMI 2153
Withdrawal of the Essentiality Certificate issued to the petitioner college by Respondent No. 1 under Section 10A of the IMC Act read with the Establishment of Medical College Regulations, 1999 - whether the State Government has the power to withdraw an Essentiality Certificate once granted, and whether the power to do so is ultra-vires the Act and the Regulations framed thereunder?
HELD THAT:- The concerned State Government is required to certify that it has decided to issue an Essentiality Certificate for the establishment of a Medical College with a specified number of seats in public interest, and further that such establishment is feasible. Importantly, the State Government is required to certify that if the applicant fails to create an infrastructure for the Medical College as per the MCI norms and fresh admissions are stopped by the Central Government, the State Government shall take over the responsibility of those seats that already admitted in the College with the permission of the Central Government. An amendment to the notification also requires a declaration that the applicant owns and possesses adequate land on which non-agricultural use of the land is permitted and on which a Medical College can be established. It further requires a declaration to the effect that the Hospital and Medical College have been granted completion certificate / building use certificate - Essentiality Certificate thus certifies that it is essential having regard to specified factors that the opening of the proposed college is essential in the State, in public interest. Further, that the applicant has the necessary land and building for running it. What is significant to note is that the law requires that an applicant must possess an Essentiality Certificate from the State Government mentioning therein that it is essential to have a Medical College as proposed by him. The purpose is interalia to prevent the establishment of a college where none is required or to prevent unhealthy competition between too many Medical Colleges.
The question of justified existence of a college and the irregular/illegal functioning of an existing college belong to a different order of things and cannot be mixed up. A certificate constitutes a solemn statement by an authority certifying certain conditions of things. Persons acting on such certificates are entitled to assume that the certificate will ensure and not be pulled out from under their feet for extraneous reasons - none of the reasons for withdrawing the Essentiality Certificate pertain to factors which are certified as true in the prescribed Form 2.
The function of the State Government in granting an Essentiality Certificate must be construed as a quasi judicial function. The Government is required to, while issuing the certificate in Form 2, to determine the justification and feasibility of opening the proposed college in the State. Towards this purpose, it is bound to enquire and determine the existence of several factors such as the number of existing institutions, the number of doctors becoming qualified annually, the number of doctors registered with the State Medical Council and employed in Government Service, registered with employment exchange etc. - The issuance of certificate must therefore be construed to be a quasi judicial act. The upshot is that such an act is not liable to be construed as an “order” contemplated by Section 21 of the General Clauses Act. Not being an order, and certainly not being a notification, rule or bye-law, Section 21 has no application whatsoever.
Condition No.(XI) is ultra- vires the provisions of the IMC Act and Regulations. In the result, the order dated 01.11.2017, issued by Respondent No. 1- State of Punjab, withdrawing the Essentiality Certificate is quashed and set aside and Condition Nos.(VII) and (XI) are declared illegal.
Petition allowed.
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2018 (7) TMI 2152
Maintainability of application - appeal rejected on the ground that the appellant has claimed the legal expenses under Section 8(1) of the ‘I & B Code’ - HELD THAT:- In so far as the claim of the respondent is that there is an agreement where arbitration clause is there, we hold that mere mentioning of arbitration clause cannot be taken into consideration to hold that there was an existence of dispute. Any dispute subsequent to issuance of Demand Notice cannot be taken into consideration to reject an application under Section 9 and therefore, we are of the view that the Adjudicating Authority wrongly rejected the application on the ground that the appellant included legal claim.
Case remitted to the Adjudicating Authority to admit the case and pass order of moratorium and appointment of Interim Resolution Professional - appeal allowed by way of remand.
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2018 (7) TMI 2151
Maintainbaility of petition - HELD THAT:- It is stated that the petitioner’s grievance has been redressed and a speaking order made on the Bills of Entry in question.
The claim has been rendered infructuous, the writ petition is disposed of as such.
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2018 (7) TMI 2150
TP Adjustment - comparable selection - Comparability analysis - Treatment to foreign exchange gain - HELD THAT:- Foreign exchange fluctuation gain earned by assessee is operating income and therefore Ld.TPO/AO is directed to adjust the margin of the assessee by treating foreign exchange gain as operating income of assessee for determining PLI for comparability analysis.
Assessee is engaged in providing software development services to its group AE - In TP study report assessee has been categorised as a full-fledged enterprise no real service provider engaged in the business of software development services.thus companies functionally dissimilar with that of assessee need to be deselected.
Deduction u/s 10A - Whether income pertaining to un billed revenue is derived from export of software services and the same is eligible for deduction under section 10 A (3)? - HELD THAT:- The agreements entered into by assessee with the parties with whom export have been effectuated, were placed before Ld.AO for his perusal and AO has not disputed the export of goods.
In the light of the above and considering the fact that assessee generally has some amount of unbilled revenue for every Assessment Year which is subsequently received, we allow this ground raised by assessee.
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2018 (7) TMI 2149
Bogus LTCG - share transactions made through broker - non-genuine transaction - HELD THAT:- Issue decided in Smt. Pooja Agarwal [2017 (9) TMI 1104 - RAJASTHAN HIGH COURT] wherein held Simply mentioning that the findings are in the appraisal report and appraisal report is made by the Investing Wing after considering all the material facts available on record does not help much. AO has failed to prove through any independent inquiry or relying on some material that the transactions made by the appellant through share broker were non-genuine or there was any adverse mention about the transaction in question in statement of broker.
Simply because in the sham transactions bank a/c were opened with HDFC bank and the appellant has also received short term capital gain in his account with HDFC bank does not establish that the transaction made by the appellant were non genuine. Considering the share transactions made through broker cannot be held as non- genuine. Consequently denying the claim of short term capital gain made by the appellant before the AO is not approved. AO is therefore, directed to accept claim of short term capital gain as shown by the appellant - Decided in favour of assessee.
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