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Case Laws
Showing 221 to 240 of 1076 Records
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2014 (10) TMI 864
Transfer pricing adjustment - issue of selection of comparables - Held that:- A comparison of the functional profile of the assessee, which is extracted by us in the earlier part of this order demonstrates that it is different from the functional profile of M/s Motilal Oswal Investment Advisors P.Ltd., At page 79 of the paper book copy of the directors report presented along with the audited accounts of the company M/s Motilal Oswal Investment Advisory P.Ltd., was enclosed. A perusal of the same demonstrates that the company had unique success with its delivery capabilities in cross product border acquisition for its clients. This is in addition to providing clients with optimal solutions across various products viz. Capital market, private equity and mezzanine finance. Hence the argument of the assessee that the functional profile of M/s Motilal Oswal Investment Advisors P.Ltd., is different from the functional profile of the assessee is correct and hence has to be accepted.
M/s Cyber India Research Ltd., now known as IDC Ltd., is primarily dealing with research survey services and products. It also demonstrates that Cyber India Ltd. has launched numerous media properties for the B2B communities which has made it the largest specialized media house in the country. The other functions performed by IDC and the properties held by IDC demonstrate that the functional profile is totally different from the functional profile of the assessee, which is in the activity of providing investment advisory services to its A.E. In view of the above, we are inclined to uphold the order of the TPO as upheld by the DRP and reject this claim of the assessee. TPO was right in rejecting M/s Cyber India Research Ltd. Now known as IDC as a comparable.
TPO is directed to provide the benefit of + 5% range to the assessee
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2014 (10) TMI 863
Short Grant of Interest u/s. 244A - Held that:- CIT(A) has erred in not accepting the submissions of the assessee and, therefore, the order passed by Ld. CIT(A) should be set aside and AO may be directed to recalculate the interest under section 244A of the Act in accordance with the proposition accepted by the Tribunal in the group case. - Decided in favour of assessee for statistical purposes
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2014 (10) TMI 862
Addition on a/c of adjustment of arm’s length price - CIT(A) deleted the addition - selection of comparable - Held that:- Considering the judicial precedent that the finding arrived at in the impugned order deserves to be upheld as to exclude Vishal Technologies as a comparable. The fact remains that Vishal has a different business model is a consistent fact on record qua the said comparable which finding has not been rejected by the Revenue.
Working capital adjustment - Held that:- The assessee consistently has sought right from the assessment stage the adjustments for working capital deployment in its comparables, the working has been placed before the AO and again before the CIT(A). Whereas ld. AO on principle held it to be not allowable, the CIT(A) considering the same has come to the finding under challenge by the Revenue. Apart from the general argument which on facts is found to be not correct no infirmity in the working accepted by the CIT(A) has been brought to our notice. In the aforementioned peculiar facts and circumstances being satisfied by the finding arrived at which has been reproduced in the earlier part of this order, we dismiss the departmental ground.
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2014 (10) TMI 861
Maintainability of application with Settlement Commission - Outstanding Central Excise duty - non-compliance of the provisions of clause (d) of proviso to Section 32E(1) of the Central Excise Act, 1944 as the applicant has not paid the entire admitted duty liability besides not quantified the interest and paid the same - Held that:- The Bench considers that the application is not maintainable and liable for rejection for non-compliance of the provisions of clause (d) of proviso to Section 32E(1) of the Central Excise Act, 1944 since the additional amount of duty accepted by the applicant in his application should be paid along with interest due under Section 11AA. Accordingly, the Bench rejects the application under Section 32F(1) of the Central Excise Act, 1944. However, the applicant is at liberty to approach this Commission after complying with the requirements of provisions of Section 32E(1)(d) ibid.
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2014 (10) TMI 860
TDS u/s 194A - tds liability on interest on time deposits by a co-operative bank clause (viia) - Held that:- Interest paid on time deposits by a co-operative society, other than a co-operative society or bank referred to in sub-clause (a), engaged in carrying on the business of banking will be covered by sub-section (1), and therefore, will be liable to deduct income-tax.
The appellant does not have a case before us that the 4th petitioner, the first respondent herein, does not come within any of the types of co-operative societies made mention of in sub-clause (a) of clause (viia) of sub-section (3) of section 194A of the Act. Therefore, irrespective of Whether it is a time deposit or any other type of deposit, the 4th petitioner, first respondent will not be liable to deduct income-tax, as such society is under sub-section (3) taken out of the purview of section 194A(1) of the Act.
Liability of tds on Co-operative Society carrying on a business of banking u/s. 194A - Held that:- In terms clause (v) which is general in nature will not apply to the co-op bank. The provisions of Section 194A (1)(viia) is clearly applicable and therefore the "assessee" has to deduct T.D.S. on income credited or paid in respect of deposits except which falls under that provisions
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2014 (10) TMI 859
Levy of penalty - appellant had entertained a bonafide belief that they need not discharge service tax on the cars rented to UNICEF and other rent-a-cab operators. - Tribunal in [2013 (12) TMI 1516 - CESTAT BANGALORE] refused to waive the penalty u/s 80 - No reason to interfere with the impugned order of the learned Tribunal. - Decided against the appellant.
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2014 (10) TMI 858
Rendering ‘technical services ’ outside India in connection with the export of computer software - whether the Appellate Tribunal erred in confirming the order of the Assessing Authority that the marketing expenses incurred by the appellant outside India to prospect its business also form part of ‘export turnover’ within the meaning of Explanation 2 to Section 10A? - Held that:- This Court had an occasion to consider the substantial questions of law in the case of The Commissioner of Income Tax & another v/s. Motor Industries Co. Ltd. [2015 (7) TMI 876 - KARNATAKA HIGH COURT ], wherein it was held that if the technical services rendered by the assessee’s engineers is in connection with the export of computer software, such expenses cannot be excluded in computing the export turnover, as it forms part of the export turnover. Following the said judgment, in the case of the assessee itself, for the assessment year 2001-02, we have answered the said substantial questions of law in favour of the assessee and against the revenue.
Computer software sales - whether such sales do not fall under the expression ‘export turnover’ for the purpose of deduction under Section 10A of the Income Tax Act, 1961? - Held that:- A relying on assessee's own case [2015 (10) TMI 634 - KARNATAKA HIGH COURT] the issue is to be decided in favour of the assessee and against the revenue.
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2014 (10) TMI 857
MAT computation - Whether the provision for doubtful debts and the provision for loss of assets is required to be added back to the book profit as required under Section 115JA of the Act in terms of explanation to Section 115JA of the Act, in particular clauses (c) and (g)? - Held that:- From judgment of CIT v. Yokogawa India Ltd. [2011 (8) TMI 766 - KARNATAKA HIGH COURT] it is clear if the bad debt or doubtful debt is reduced from the loan and advances from the debtors on the assets side of the balance sheet, the Explanation to Section 115JA or 115JB of the Act is not at all attracted. If it is not reduced, Section 115JA of the Act is attracted. It is purely a question of fact. From the material on record it is not possible to make out whether the aforesaid bad and doubtful debts are reduced from the loan and advances of the debtors from the assets side of the balance sheet. Without ascertaining the said fact it is not possible to answer the substantial question of law one way or the other. Therefore, the proper thing to do is to set aside the impugned orders and remit the matter back to the First Appellate Authority with a direction to the Authority to look into the records and then record a finding one way or the other in the light of the aforesaid judgment. That would meet the ends of justice. Therefore, the substantial question of law is not answered.
Impugned orders passed by both the Appellate Authorities are set aside and the matter is remitted back to the First Appellate Authority for fresh consideration in the light of the judgment and pass appropriate orders.
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2014 (10) TMI 856
Import of baggage - Gold ornaments versus pure gold ornaments - According to the appellants, the words ‘gold ornaments’ ought to have been interpreted as ‘gold ornaments with 22 carat purity’ and not as gold ornaments with 24 carat. - Review petition against the order [2014 (12) TMI 268 - KERALA HIGH COURT] - Held that:- We do not find any satisfactory reason which calls for a review of the judgment. We are unable to find any mistake or error apparent on the face of the record or any other sufficient reasons or circumstances, which warrants a review of the judgment. - It is settled law that even an erroneous decision cannot be ground for review - Decided against the petitioner / revenue.
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2014 (10) TMI 855
Estimation of the appellant’s business profit at 2.5% of the total turnover - Held that:- In the instant case, when the assessee did not produce the books of accounts, the assessing officer was not helpless. The assessee has been filing returns every year. In fact, he has produced five years returns. It is from that they took the turnover because the turnover offered by the assessee for the year 2009-10 was comparable with the past five years turnover as reflected in the returns filed. They acted on that. However, he refused to act on the profits shown in the said returns. No reasons are given for not relying on the said profits at the same time, he has also not taken into consideration the comparable cases in similar business to come to the conclusion. Without any basis, the assessing authority determined the profit at 8%, the first appellate authority reduced it to 3% and the tribunal has reduced it to 2.5%. In coming to the said finding, all the three authorities have declined to take note off the evidence by way of earlier returns. In that view of the matter, what the authorities have done is a mere guess work and without any basis. That is not permissible in law as held in the case of RAGHUBAR MANDAL HARIHAR MANDAL vs THE STATE OF BIHAR [1957 (5) TMI 28 - SUPREME COURT OF INDIA]
In that view of the matter, the impugned orders are unsustainable. Hence, the order passed by the tribunal is hereby set-aside. Matter is remitted back to the tribunal for fresh consideration in the light of the observations made above. Decided in favour of the assessee for statistical purposes.
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2014 (10) TMI 854
Situation where VAT Tribunal is not function - Punjab VAT - Challenge to the order of the Deputy Commissioner (Appeal) remitting the matter back to the assessing authority for passing a fresh order. - Counsel for the petitioner submits that if the VAT Tribunal has been constituted, the Tribunal may be directed to decide the appeals and during pendency of the appeals the draft order of the assessing authority may be kept in abeyance. Counsel for the State of Punjab fairly states that during pendency of the appeal, consideration of the draft assessment order by the assessing authority shall be kept in abeyance and shall await outcome of the appeals filed before the VAT Tribunal.
Held that:- We have heard counsel for the parties and dehors the merits of the controversy particularly averments in the writ petition as well as grounds raised in the appeals, which is admittedly pending before the VAT Tribunal, dispose of the writ petition by directing the VAT Tribunal to decide the appeals within three months from today.
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2014 (10) TMI 853
The Appellate Tribunal ITAT Bangalore dismissed the stay petition for recovery of outstanding demand of 1,44,67,288/- as the appeal had already been heard and disposed of on 10.10.2014. The stay petition was deemed infructuous and dismissed. (2014 (10) TMI 853 - ITAT BANGALORE)
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2014 (10) TMI 852
Treatment given to foreign currency expenditure deducted from the export turnover for the purpose of computing the deduction u/s 10A - Held that:- As decided in CIT vs. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] there should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is intended to provide incentives to promote exports. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Formula will be = Profits of the business of the undertaking × Export turn over / (Export turnover + domestic turn over) Total Turn Over
Non deduction of tax at source - foreign currency expenditure in relation to recharge of international assignee cost were considered as technical service fee - Held that:- The issue requires a revisit by the Assessing Officer. Whether the employees of the affiliates abroad were rendering services to the assessee company, as a part of any technical services agreed to be rendered by such affiliates to the assessee, has to be seen based on the verification of actual services rendered by them. Assessee should also be given an opportunity to show that the employees came to India only on a secondment and had not rendered any technical services on behalf of the affiliates abroad. We, therefore, set aside the order of the Assessing Officer in this regard and remit the issue back to the file of the Assessing Officer for consideration afresh. - Decided in favour of assessee for statistical purposes.
TPA - selection of comparable - Held that:- Assessee here is engaged in the software development business thus comparbles of same nature are to be accepted .
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2014 (10) TMI 850
TDS u/s 194C - disallowance u/s 40(a)(ia) - Held that:- the second proviso to section 40(a)(ia) of the Act is retrospective in operation w.e.f. 1/4/2005. As per this newly inserted proviso, the assessee is required to file Form No.26A as per rule 31ACB of the IT Rules,1962 so as not to be held as an assessee in default as per the proviso to section 201 of the Act. As held in the decision of the co-ordinate bench in the case of S.M.Anand vs. ACIT (2014 (2) TMI 1206 - ITAT BANGALORE), since the assessee in the period under consideration i.e. assessment year 2005-06, could not have contemplated that such a compliance was to be made, we also in the case on hand, remit the matter to the file of the Assessing Officer. The Assessing Officer is directed to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 1,53,78,795/- on account of payments to Shri Uday Kumar Shetty after affording the assessee adequate opportunity to file Form No.26A and verification of whether the said payee has reflected the payment/receipt in his books of account and offered the same to tax in the period under consideration. In these circumstances, we set aside the order of the ld.CIT(A) to the file of the Assessing Officer only for the limited purpose as directed above. - Decided in favour of assessee for statistical purposes.
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2014 (10) TMI 849
Extension of stay order beyond 365 days - matters the appeal could not be disposed of on account of heavy pendency and the delay in non-disposal is not attributable to the appellants. - Held that:- The Larger Bench of the Tribunal in the case of M/s Haldiram India Pvt. Ltd. vs. CCE, Delhi [2014 (10) TMI 724 - CESTAT NEW DELHI (LB)] has held that when the delay in disposing of appeal is not attributable to the appellants, extension of stay can be granted. - Stay extended.
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2014 (10) TMI 848
Eligibility for deduction u/s 80P - whether the interest income earned by the assessee society from making deposits in short term deposit in banks will qualify for exemption u/s 80P(2)(a)(i) - Held that:- The deposits which are made by the assessee are out of the deposit collected by the assessee from its members. The assessee society also provides loan and credit facilities to its members. When the funds are lying idle they are invested in the short term in bank deposits. In this view of the matter we find that assessee's contention is cogent that when the real income from the bank deposit has to be considered, it is to be seen in the light of the interest which the assessee has to pay to its members on its deposits and also the administration cost of making such deposits. This contention of the assessee has duly been accepted by the Revenue as is emanating from the order of AO in A.Yr.2009-10. In the said assessment order the AO had computed the gross interest on bank deposit at ₹ 1,24,16,335/-. From this the AO has allowed the interest paid by the assessee to its members amounting to ₹ 1,21,31,880/-. Only the resultant income from bank deposits amounting to ₹ 2,84,445/- was brought to tax. We do not find any reason as to why this principle should not be adopted in the current year. In our considered opinion the ld. CIT(A) has erred in not entertaining this plea of the assessee.
We further find that the issue involved is covered in favour of the assesee by catena of decisions of the Tribunal in assessee's own case to held income from investment in banks and other financial institutions is the business income of the assessee society and it is eligible to get deduction under Section 80P(2)(a)(i) - Decided in favour of assessee
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2014 (10) TMI 847
Addition under Section 2(22)(e) for deemed dividend - Held that:- The sum of ₹ 6,50,000/- cannot be treated as loan and advance within the meaning of Section 2(22)(e). Another sum paid by DIPL to the assessee is ₹ 9,75,000/-. We find that on the same date i.e. 4th March, 2008, there is a payment by the assessee of ₹ 10 lakhs to DIPL. Therefore, in our opinion, the sum of ₹ 9,75,000/- also cannot be treated as loan and advance within the meaning of Section 2(22)(e).
For each and every transaction, there is a contra entry almost simultaneously. In most of the cases, the cheque paid by the assessee is a day earlier than the cheque received from DIPL. However, in respect of ₹ 25 lakhs only, we find that the sum of ₹ 25 lakhs is credited to the account of the assessee on 17.2.2009 and the payment of ₹ 25 lakhs i.e. by two cheques of ₹ 14,50,000/- and ₹ 10,50,000/- is debited to assessee's account on 16.2.2009. Considering these facts, we agree with the assessee's contention that the cheque was given by the assessee simultaneously and it is only a delay of deposit of that cheque by one day by DIPL. Considering the totality of the facts and the arguments of both the sides, in our opinion, the sum of ₹ 14,50,000/- and ₹ 10,50,000/- cannot be treated to be in the nature of loan and advance so as to treat the same as deemed dividend within the meaning of Section 2(22)(e).
In view of the above, in our opinion, only a sum of ₹ 1 lakh is liable to be taxed as deemed dividend. Accordingly, the addition of ₹ 45,36,024/- is reduced to ₹ 1,00,000/-. - Decided in favour of assessee in part.
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2014 (10) TMI 846
Loss on account of exchange fluctuation - Allowable deduction while computing income under the head "Profits and gains of business" - Held that:- On a reading of the assessment order and the letter issued by the Corporation Bank, Credit Division (Sanctions), it is clear that the assessee did not utilise foreign currency term loan for acquiring capital asset in India. The assessee has obtained term loans in Indian currency from the Corporation Bank acquired the assets and later on the outstanding liability of three term loans was converted into foreign currency term loan. The assessee has not acquired assets from outside India, therefore the provisions of section 43A which provides for adjustment of rate of exchange in currency to the actual cost has no application in the assessee's case as the provisions of section 43A applies to an assessee who has acquired any asset in any previous year from the country outside India and increase in liability in consequence of any change in the rate of exchange during that previous year after acquisition of such asset. Even the definition of actual cost in section 43A does not provide for any increase or reduction due to exchange rate fluctuation on account of the assessee converting its Indian term loans into foreign currency term loan. The assessee is consistently following the method of showing gain/loss on account of exchange fluctuation as revenue loss following the Accounting Standard 11. As submitted by the counsel, the assessee had in fact shown gain in exchange fluctuation during the assessment year 2008-09 and also in the assessment year 2010-11. In such circumstances, the loss on account of exchange fluctuation cannot be treated as capital loss - Decided in favour of assessee.
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2014 (10) TMI 845
Addition on account of deficit closing stock during the course of survey proceedings under section 133A - CIT(A) deleted the addition - Held that:- No reason to interfere with the order of the Ld. CIT(A). Revenue did not bring out any evidence about the deficit stock and assessment order is not speaking about how the deficit stock was arrived at in the course of survey proceedings even though the same was quantified at ₹ 39,28,298. Aassessee has accounted for sales of the deficit stock but as seen from the order of Ld. CIT(A), the same was accounted at ₹ 48,83,168. This aspect has not been reconciled by the ITO. Not only that assessee also admitted additional income of ₹ 10 lakhs which factor was also accepted by the A.O. by making only addition of ₹ 40 lakhs. Since, entire deficit stock cannot be considered as income of assessee, Ld. CIT(A) is correct in deleting the addition made by A.O. as assessee has already admitted gross profit at 25% which is in tune with the gross profit earned during the year on other turnovers. In fact, A.O. himself has recorded the facts that turnover for the year is increased by 31.13% and gross profit by 50%. Since A.O. accepted the book results and nothing was brought on record other than the so-called statement of the partner admitting additional income, we uphold the order of Ld. CIT(A) and dismiss Revenue grounds. - Decided against revenue
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2014 (10) TMI 844
Detention of imported betel nuts at Cochin Port - Rejection of samples - on the ground that samples do not conform to the standards specified under the Food Safety and Standards Act, 2006 (for short, the "FSS Act") - Held that:- Unable to accept the arguments advanced by the petitioners that betel nuts cannot be considered as "food". The definition of "food" is expansive in Section 3(j) which includes any type of substance whether processed or unprocessed, which ultimately is intended for human consumption would attract the meaning of food within clause (j) of Section 3. The meaning of food do not depend upon immediate or proximate use of the substance for human consumption. The only criteria to determine a substance is food or not is whether the substance is intended for human consumption or not. The ultimate purpose must be for human consumption. Therefore, any substance which is intended for human consumption would fall within the definition of food as defined under the FSS Act.
Betel nut cannot be a dry fruit coming under the standards prescribed under PFA Act and further held that betel nuts imported cannot be subjected to the tests for the standards prescribed for dry fruits and nuts. Also of the view that though Al Marwa's case (2007 (1) TMI 554 - Kerala High Court ) was under the Prevention of Food Adulteration Act (for short, the "PFA Act") there is no difference in prescription of standards in respect of dry fruits and nuts under the PFA Act or FSS Act. Therefore, for non conformity of the standards prescribed for dry fruits and nuts, betel nuts imported by the petitioners cannot be detained.
Considering the facts and circumstances, it is of the view that since the goods have been allowed to be released by interim orders of this Court, no further reliefs are required in these writ petitions.
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