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Showing 221 to 240 of 1251 Records
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2012 (12) TMI 1033
Issues Involved:
1. Compliance with Order 21 Rules 84 and 85 CPC.
2. Right of the judgment debtor to set aside the auction sale.
3. Interpretation of the term "immediately" in the context of depositing the bid amount.
Summary:
Issue 1: Compliance with Order 21 Rules 84 and 85 CPC
The appellant challenged the auction sale on the grounds that the auction purchaser did not deposit 25% of the bid amount immediately on the fall of the hammer, as mandated by Order 21 Rule 84 CPC. The Executing Court and the High Court found that the auction purchaser had deposited 25% of the bid amount on the date of the auction (8.10.2010) and the remaining 75% within the statutory period, thus complying with Order 21 Rules 84 and 85 CPC. The Supreme Court agreed with this finding, stating that the auction purchaser had complied with the provisions in letter and spirit.
Issue 2: Right of the Judgment Debtor to Set Aside the Auction Sale
The appellant argued that he should have been allowed to deposit the entire sale amount to set aside the auction sale, as he had a pre-emptive right and was willing to pay the amount. The Supreme Court noted that the appellant did not comply with the mandatory requirement of depositing the amount within the stipulated time as per Order 21 Rule 89 CPC. The Court emphasized that the rule is in the nature of a concession to the judgment debtor, who must strictly comply with its requirements. The appellant's application on 1.12.2010 without depositing the amount was not entertained, and the sale was confirmed on 23.10.2010.
Issue 3: Interpretation of the Term "Immediately"
The appellant contended that the term "immediately" in Order 21 Rule 84 CPC required the deposit of 25% of the bid amount at the fall of the hammer. The Supreme Court referred to its judgment in Talco Bank, which extended the meaning of "immediately" to mean "with all reasonable speed, considering the circumstances of the case." The Court found that the auction purchaser had paid Rs. 2.40 crores by way of drafts on 8.10.2010, which satisfied the requirement of "immediately."
Conclusion:
The Supreme Court dismissed the appeal, finding no error in the judgments of the Executing Court and the High Court. The appellant's belated offer to deposit the amount was rejected, and the auction sale was confirmed. The appeal lacked merit and was dismissed with no order as to costs.
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2012 (12) TMI 1032
Revision u/s 263 - Held that:- A.O. has examined each and every of the issues, as per law. The order of ld. CIT is directory in the nature which is based on his own view as against the taken by the A.O. We don't find any lack of inquiry or even a case of inadequate inquiry. Under section 263, the commissioner cannot substitute his own view.
He has not given any valid reason as to how the assessment order is erroneous. He has simply stated that the assessment order dated 7.1.2011 is erroneous and prejudicial to the interest of the revenue to that extent. The intention of this section is somewhat different. In case the A.O. has not made enquiries and taken an erroneous decision regarding an item of income, only then the order can be said to be erroneous on that point. A.O. takes a possible view qua a claim made and the ld. CIT takes another possible view, the order cannot be said to be erroneous.
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2012 (12) TMI 1031
Grant of registration u/s. 12A - proof of charitable activities - Held that:- Main activity of the trust was to provide education to students of architecture as per the course approved by the appropriate authorities and the admission policy, the fee structure endorsed by the Government of India. - The objects, cannot be said to be the objects, which run against public policy or do not fall within the category of activities, which are for charitable purposes. Education in itself is a charitable purpose and activities related thereto, cannot, in any manner, be described as a non-charitable purpose or much less a non-educational activity. It has also not been brought on record that the fees collected by the assessee was for any other object-except that mentioned in the objects of that society.
Sec. 12AA does not speak anywhere that the CIT, while considering the application for registration, shall also see that the income derived by the trust or the institution is either not being spent for charitable purpose or such institution is earning profits. In these circumstances, CIT was not justified in refusing registration under sec.12AA to assessee. His observation with regard to alleged accounting irregularities are not relevant for deciding the issue of registration.
As perused the Trust Deed of the Assessee-Trust. In our opinion, nature and activities of the Trust prove that it is an institution covered by the provisions of Sec. 2(15) of the Act.
As a result, appeal filed by the assessee stands allowed and CIT-III, Nagpur is directed to grant registration u/s. 12A of the Act to the Assessee-Trust.
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2012 (12) TMI 1030
Issues involved: Rectification of order dated 30-04-2010 by ITAT for AYs 2000-01, 2002-03, 2004-05 & 2005-06 to include AY 2003-04 in the headnote.
Summary:
The Miscellaneous Application (MA) was filed by the assessee seeking rectification of an order dated 30-04-2010 by the ITAT for AYs 2000-01, 2002-03, 2004-05 & 2005-06 to include AY 2003-04 in the headnote. The issue revolved around agricultural income and household drawings. The ld. AR contended that the ITAT had examined the matter in question and common findings were recorded in the impugned order. However, upon examination of the records, it was found that the ITAT did not adjudicate on the issues raised by the assessee for AY 2003-04 in their order dated 30-04-2010. The Revenue appeal for the same assessment year was pending, and cross-appeals are required to be heard simultaneously as per legal precedents. Therefore, the plea of the assessee for rectification was deemed baseless and devoid of merit. The Bench rejected the miscellaneous application.
In conclusion, the ITAT dismissed the Miscellaneous Application seeking rectification of the order dated 30-04-2010 for AYs 2000-01, 2002-03, 2004-05 & 2005-06 to include AY 2003-04 in the headnote, as the issues raised by the assessee were not adjudicated upon and the plea was found to be without merit.
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2012 (12) TMI 1029
Issues Involved:
1. Deletion of addition on account of technical and marketing fees.
2. Validity of reopening of assessment beyond four years.
3. Disallowance of provision for bad and doubtful debts.
Summary:
Issue 1: Deletion of Addition on Account of Technical and Marketing Fees
The Revenue's appeal contested the deletion of an addition of Rs. 17,61,22,206/- on account of technical and marketing fees. The Assessing Officer (AO) had treated the payment of Rs. 216,765,792/- to M/s Seagram Manufacturing Pvt. Ltd. as capital expenditure, arguing that it was for acquiring trademark and technical know-how, thus not allowable as revenue expenditure. The AO allowed depreciation on the amount but disallowed the balance. The Ld. Commissioner of Income Tax (Appeals) [CIT(A)] reversed this, noting that the payment was for day-to-day business activities and did not result in any enduring benefit or capital asset acquisition. The CIT(A) relied on the ITAT decision in Shaw Wallace Distilleries Ltd. vs. ACIT, which was affirmed by the Hon'ble Jurisdictional High Court. The Tribunal upheld the CIT(A)'s decision, agreeing that the payment was for enhancing business efficiency and not for acquiring a capital asset.
Issue 2: Validity of Reopening of Assessment Beyond Four Years
The assessee's cross-objection challenged the reopening of the assessment beyond four years. However, since the Tribunal affirmed the CIT(A)'s order on the merits, the issue of reopening was deemed academic and not addressed.
Issue 3: Disallowance of Provision for Bad and Doubtful Debts
The AO disallowed a provision for bad and doubtful debts amounting to Rs. 2,70,509/- based on clause (i) of explanation 1 of section 115JB of the I.T. Act, which was upheld by the CIT(A). The Tribunal agreed with the CIT(A), noting that the amendment leading to the disallowance was effective on the date of assessment and applicable to the relevant financial year.
Conclusion:
The Tribunal dismissed both the Revenue's appeal and the assessee's cross-objection, affirming the CIT(A)'s decisions on all issues. The order was pronounced in the Open Court on 14/12/2012.
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2012 (12) TMI 1028
Disallowance u/s 40A(3) - assessee made the payment in cash which was to be made through cheque, therefore, there is a contravention to the provisions of Section 40A(3) - advance given to the farmers for acquisition of land - Held that:- As advances paid to the land owners for purchasing the land have not resulted in any stock in trade/work in progress for the year under consideration, therefore, on that particular date, it would not qualify for disallowance as expenses or payment within the meaning of Section 40A(1) read with Section 40A(3) - in such a situation, we are in agreement with the argument of the learned counsel for the assessee that the claim of expenditure/payment has to form part of the profit & loss account in the first place before the question of its disallowance arises. We are also in agreement with the finding of the learned CIT(A) that the advance given to the farmers for acquisition of land does not form part of stock in trade as on 31.3.2007. Therefore, the provision of Section 40A(3) would not apply. - Decided against revenue
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2012 (12) TMI 1027
Validity of the reassessment - Held that:- The consequences of failure to supply the reasons recorded u/s 148 of the Act to the assessee when asked for, the reassessment is required to the quashed. Considering the undisputed facts of repeated requests for supply of reasons by the assessee and the AO’s blanket failure to supply the reasons recorded u/s 148 the impugned reassessment is bad in law and the same is required to be quashed. Ground no.1 raised by the assessee is allowed.
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2012 (12) TMI 1026
Issues involved:
Seeking waiver of pre-deposit of impugned demands of service tax, interest, and penalties confirmed on the applicants.
Details of the judgment:
- The applicants, a Container Freight Station (CFS), were seeking waiver of pre-deposit of the impugned demands of service tax, interest, and penalties confirmed on them.
- The Revenue contended that as the service of CFS is complete when goods are received at CFS, any post-service activities do not entitle them to input service credit.
- The applicants argued that transportation charges of empty containers were included in the service charge and service tax was paid, making them eligible for input service credit under storage and warehousing service.
- After hearing the arguments, it was found that the transportation charges paid by the applicants were included in the service charges and service tax had been paid. As the service tax payment had been received by the department and included in the assessable value of the services provided, the applicants were deemed entitled to input service credit.
- Consequently, the tribunal granted a 100% waiver of pre-deposit of the entire amount of service tax, interest, and penalty, and stayed the recovery thereof during the pendency of the appeal.
*(Dictated in Court)*
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2012 (12) TMI 1025
Issues involved: Non-payment of Service Tax on incentives received from another company, challenge to the order of Commissioner of Central Excise (Appeals) for dismissing the appeal as not maintainable due to delay in filing.
Summary:
Issue 1: Non-payment of Service Tax on incentives received
The petitioner sought a writ to quash the Order-in-Appeal and direct the respondent to hear the appeal against Order-in-Original regarding non-payment of Service Tax on incentives received from a software developer. The Commissioner of Central Excise (Appeals) rejected the appeal stating non-compliance with court directions. However, in a similar case, the Commissioner (Appeals) allowed an appeal on the same issue, stating that the incentives were not connected to the services provided by the petitioner.
Issue 2: Challenge to dismissal of appeal
The petitioner's appeal was dismissed for being filed belatedly. The petitioner pleaded for the appeal to be heard on merits, citing inadvertence as the reason for the delay. The Court accepted responsibility for the delay and set aside the impugned order, directing the Commissioner (Appeals) to dispose of the appeal on merits, considering the prima facie case. The Court clarified that any decision in favor of the petitioner by the Commissioner (Appeals) would be binding unless reversed or modified by a higher forum.
In conclusion, the writ petition was allowed, and the Commissioner (Appeals) was directed to reconsider the appeal on its merits. No costs were awarded, and the connected miscellaneous petition was closed.
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2012 (12) TMI 1024
Issues Involved:
1. Constitutionality of Section 33 of the Legal Metrology Act, 2009.
2. Condition in Form LM-3 requiring verification and stamping of goods.
3. Legality of the letter dated 31-5-2012 issued by the Government of India.
Summary:
1. Constitutionality of Section 33 of the Legal Metrology Act, 2009:
The petitioners challenged Section 33 of the Legal Metrology Act, 2009, arguing that it is ultra vires Articles 14, 19, and 21 of the Constitution of India. They contended that the section imposes an unreasonable and harsh restriction on their Fundamental Right guaranteed under Article 19(1)(g) and affects their right to life and liberty under Article 21. However, the court held that Section 33, which prescribes penalties for the use of unverified weights or measures, is not unreasonable or arbitrary. The court stated that the legislative policy obligates a manufacturer to conform to the standards of weights and measures and secure such certification through verification before selling the product. The court further emphasized that the restriction imposed is a reasonable measure in the interest of the general public and does not violate Articles 14 or 21.
2. Condition in Form LM-3 requiring verification and stamping of goods:
The petitioners sought quashing of the condition in Form LM-3, which mandates that weights and measures manufactured and meant for use within the State must be verified and stamped before sale. The court observed that Section 24 of the Act mandates verification and stamping of weights and measures and that manufacturers are included within the ambit of this requirement. The court held that this regulatory measure is not an unreasonable restriction and is necessary to ensure that weights and measures conform to the standards specified under the Act.
3. Legality of the letter dated 31-5-2012 issued by the Government of India:
The petitioners challenged the letter dated 31-5-2012 issued by the Government of India, which laid down guidelines for the first verification of weights and measures. The court noted that the letter was issued to reduce the hardship of manufacturers and to adopt a uniform procedure throughout the country to avoid double stamping. The court found no merit in the petitioners' challenge to the letter and held that the hardship faced by manufacturers, if any, has been effectively redressed by the Government through this circular.
Conclusion:
The court dismissed the writ petition, holding that the contentions raised by the petitioners were unmerited. The court granted liberty to the petitioners to represent the Competent Authority if they are aggrieved by any provision of the Model Rules or instructions issued thereunder and to seek appropriate legal recourse if still dissatisfied.
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2012 (12) TMI 1023
Issues involved: Addition of undisclosed income due to differences in accounting of purchases and sales during a survey u/s 133A for the assessment year 2007-08.
Summary:
The appellant, a Hindu Undivided Family (HUF) trading in coffee seeds, challenged the addition of Q 25,64,832 as undisclosed income by the CIT(Appeals) for discrepancies in accounting purchases and sales during a survey. The Assessing Officer found unaccounted purchases and sales in the books produced during the survey, attributing it to wrong entries by employees. The AO rejected the explanation and treated the difference as suppressed profit. The CIT(Appeals) upheld the addition based on the AO's findings from impounded registers. The appellant contended that a recast statement of accounts showed lower profit. The ITAT observed that the authorities failed to consider that sales included gross profit, necessitating exclusion for accurate income calculation. The matter was remanded to the CIT(Appeals) for reevaluation, emphasizing fair hearing for the appellant.
In conclusion, the appellant's appeal was allowed for statistical purposes, with the case remanded to the CIT(Appeals) for a thorough review considering the gross profit element in sales for accurate income determination.
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2012 (12) TMI 1022
Entitled to the benefits of section 11 - Whether Extra Tuition Fee[ETF] has to be assessed in the hands of the Society or in the hands of Mr. MJB? What is the quantum of EFT that has to be taxed, whether the entire receipt in the form of ETF or whether any deduction has to be allowed on account of refund of ETF? - Held that:- AO having accepted that ETF is refundable and going by the prevailing practice that when a student does not avail of admission to the college, the same has to be refunded, it would be just and fair to resort to an estimate. No doubt the CIT(Appeals) has no basis for estimating the ETF refunded at 40%. Thus, we are of the view that it would be just and fair, if 45% of ETF collected has been refunded. Thus, this ground of appeal of the assessee is partly allowed.
The claim of the revenue that the entire ETF has to be brought to tax cannot be accepted for the reason that ETF by its nature is refundable and it is common practice that students who do not get admission, seek refund of ETF. We therefore reject the grounds of appeal of the revenue in this regard and partly allow the grounds of appeal raised by the assessee.
We also find that the AO assessing the Society has denied exemption u/s. 12 on the ground that the Society was collecting capitation fee. Since we have found that the Society was not collecting ETF, the benefit of section 11 of the Act should not be denied to the assessee Society. We therefore hold that the Society would be entitled to benefit of section 11.
In conclusion on the issues, we hold that it is only MJB who was collecting ETF and not the Society. We also hold that ETF to the extent of 55% of the total collections of ETF as evidenced by the seized documents should be brought to tax in the hands of MJB on a substantive basis. The additions made in the hands of Society is directed to be deleted. It is also held that the benefit of section 11 of the Act cannot be denied to the Society as there are no circumstances justifying the denial of benefits of section 11 of the Act to the Society. Accordingly, the grounds of appeal of the revenue in the case of the Society and MJB are dismissed, while the grounds of appeal of the assessee in the case of MJB are partly accepted.
Depreciation - Income derived from properties held under trust should be arrived at in the normal commercial manner and that a charitable institution running a school should be allowed depreciation
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2012 (12) TMI 1021
Whether the interst accured on NPA should be recognized as assessee’s income on accrual or on receipt basis - Held that:- If a particular income is due but is not possible to recover the same, then it cannot be said to have been accrued and the said amount cannot be brought to tax - the definition of NPA shows an asset becomes non performing when it ceases to yield income - when it is not yielding any revenue, the question of showing that revenue and paying tax would not arise - as per policy guidelines issued by the National Housing Bank, the income from NPA should be recognized only when it is actually received - the contention of the revenue that in respect of NPA even though it does not yield any income as the assessee has adopted a mercantile system of accounting, he has to pay tax on the revenue which has accrued notionally is without any basis - Decided in favor of assessee
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2012 (12) TMI 1020
Settlement Commission order eligibility - scope of judicial review in exercise of writ jurisdiction under Articles 226 and 227 of the Constitution of India while examining the validity of an order of the Settlement Commission - Held that:- When the Settlement Commission examines an application in terms of statutory powers and finds that such application does not satisfy the legal requirements, as contained in section 245C(1) of the Act, in our view, unless such decision of the Commission is contrary to the statutory provisions contained in the Act, interference in exercise of writ jurisdiction under Article 226 of the Constitution of India would not be warranted.
The petitioners, as recorded earlier, made strenuous efforts to convince us that the Commission ought not to have summarily dismissed the application. We are afraid this cannot be the ground on which we would reverse the Commission's order. If on the basis of material on record, the Commission could have come to the conclusion that application was not valid, it had every authority to reject the same even at the stage of first screening under section 245D(1) of the Act.
We are not convinced with the petitioners' contention that if such application was allowed to be proceeded, the petitioners would have produced additional materials in support of the requirement that the petitioner made true and full disclosure of undisclosed income and the manner of deriving the same. The petitioners were required to make an application and make such declarations as required under section 245C(1) of the Act. They could not have hoped for or insisted upon a second innings to do so beyond the stage of section 245D(1) of the Act - petition dismissed.
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2012 (12) TMI 1019
Issues involved: Dispute regarding levy of penalty u/s 271(1)(c) of the Income Tax Act for Assessment Year 2005-06 based on income declared by the assessee during a search u/s 132.
Facts: The assessee initially declared total income of Rs. 4,33,073/- in the original return for the Assessment Year 2005-06. Subsequently, during a search u/s 132, it was found that additional income had not been declared. The Managing Partner later declared Rs. 59.56 lacs as income for the same year. The Assessing Officer initiated penalty proceedings u/s 271(1)(c) based on this undisclosed income.
Arguments before CIT(A): The assessee contended that the income offered was subject to a difference of opinion regarding the method of income computation, based on the timing of offering income from completed projects. The CIT(A) accepted the explanation, noting that the non-declaration was due to a genuine difference of opinion and past acceptance of the method by the department.
Decision of CIT(A): The CIT(A) held that penalty u/s 271(1)(c) was not justified as the income declared was based on existing book entries and the method followed by the assessee. The CIT(A) emphasized that the non-disclosure was not deliberate and set aside the penalty imposed by the Assessing Officer.
Arguments before ITAT: The Revenue challenged the CIT(A) order, arguing that the additional income was declared only after the search, indicating lack of voluntary disclosure. The assessee maintained that the non-disclosure was due to a genuine difference of opinion and consistent past practice accepted by the department.
ITAT's Decision: The ITAT analyzed the case and found that the explanation provided by the assessee for not declaring the income earlier was bonafide, given the consistent method followed and past acceptance by the department. Therefore, the ITAT upheld the CIT(A) decision, confirming that penalty u/s 271(1)(c) was not applicable in this scenario.
Conclusion: The ITAT dismissed the appeal filed by the Revenue, affirming the decision that penalty u/s 271(1)(c) was not leviable in this case.
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2012 (12) TMI 1018
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee is engaged in the business of provision of software development services. The assessee in the relevant previous year entered into the international transaction of rendering the software development services to its associated enterprise.
Unrelated enterprise having controlled transaction can not be considered as comparable to the assessee while applying TNMM. As a company having substantiated related party transaction, may influence the profits of the company - enterprise is to be considered as uncontrolled for the purpose of benchmarking analysis of the ratio of related party transaction to the relevant base i.e. sales or cost does not exceed the limit of 25%. The related party transaction referred here are those which have a bearing on the net profit of the enterprise.
Computation of deduction u/s. 10A. - Held that:- We hold that freight telecommunication or insurance charges during the year that are reduced from the export turnover, then such sum will also have to be reduced from the total turnover of the company for the purpose of computation of deduction u/s. 10A.
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2012 (12) TMI 1017
Issues involved: Appeal against the judgment of the Income-tax Appellate Tribunal regarding deletion of addition of unexplained cash credit under Section 68 of the Income-tax Act, 1961.
Summary:
1. The Revenue appealed against the Tribunal's decision to delete the addition of Rs. 10,09,000 under Section 68 of the Act. The Tribunal found that only Rs. 50,000 was received in the present year, with the balance being an opening balance. Consequently, the Tribunal deleted the balance addition, considering only the Rs. 50,000 for addition under Section 68.
2. The Tribunal reasoned that since the assessee could not properly explain the Rs. 50,000 received in the present year, they deserved the benefit of telescoping against the addition made by the Assessing Officer. The total addition confirmed by the Tribunal was Rs. 1,58,606, while the fresh loan was only Rs. 50,000, leading to the deletion of the Rs. 50,000 addition as well.
3. The Tribunal's decision to delete the majority of the addition was based on the fact that only Rs. 50,000 was received in the year under consideration, while the rest was an opening balance in the assessee's account. The Tribunal's view was upheld as no error was found in their reasoning.
4. Regarding the deletion of the Rs. 50,000 addition, the Tribunal acknowledged it as unaccounted credit but applied the principle of telescoping to delete the addition since they had independently confirmed a larger addition of Rs. 1.58 lakhs. The Court noted that although the Revenue could appeal against this decision, the relatively small amount did not warrant further consideration.
5. The Tax Appeal was ultimately dismissed by the Court.
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2012 (12) TMI 1016
Issues Involved:
1. Recall of Tribunal's order due to Supreme Court's decision.
2. Applicability of limitation period under section 254(2).
3. Nature of Tribunal's order under Rule 12 of ITAT Rules.
4. Retrospective effect of Supreme Court's decision.
5. Procedural aspects concerning appeals and COD approval.
Issue-Wise Detailed Analysis:
1. Recall of Tribunal's Order Due to Supreme Court's Decision:
The Department sought to recall the Tribunal's order dated 01/02/2007, which dismissed the Department's appeal for lack of COD approval, based on the Supreme Court's decision in Electronics Corporation of India Ltd. v. Union of India [2011] 332 ITR 58 (SC). The Supreme Court had recalled all its orders requiring COD approval for Public Sector Undertakings and Government Departments to initiate legal proceedings against each other.
2. Applicability of Limitation Period Under Section 254(2):
The counsel for the assessee argued that the miscellaneous application was barred by limitation under section 254(2) as it was filed beyond four years from the date of the Tribunal's order. The Special Bench decision in Arvindbhai H. Shah v. Asst. CIT [2004] 91 ITD 101 (Ahd.) (SB) was cited, which held that no order could be amended through rectification after four years from the date of the order. However, the Department contended that the limitation period should not apply in this case, drawing an analogy with sections 153(3) and 153(2A) of the Income Tax Act, which allow for extensions in specific circumstances.
3. Nature of Tribunal's Order Under Rule 12 of ITAT Rules:
The Department argued that the impugned order was not an order under section 254(1) but an order under Rule 12 of the Income Tax Appellate Tribunal Rules, 1963. Rule 12 deals with the rejection or amendment of the memorandum of appeal and is considered an interim order. The Tribunal had dismissed the appeal without adjudicating it on merits due to the lack of COD approval, but had granted liberty to seek adjudication on merits if COD approval was furnished later.
4. Retrospective Effect of Supreme Court's Decision:
The Tribunal noted that the Supreme Court's decision to recall its earlier orders on COD approval was not merely prospective. The Supreme Court's recall of its orders made the earlier requirement for COD approval non-existent. The Tribunal emphasized that the recall of an order by the Supreme Court makes the earlier order non est (non-existent). Therefore, the Department's contention that COD approval was not required after the Supreme Court's decision was accepted.
5. Procedural Aspects Concerning Appeals and COD Approval:
The Tribunal discussed the procedural aspects of appeals, emphasizing that the primary intention of the legislature is to ensure that rights and liabilities of parties are finally settled. The Tribunal has the power to pass interim orders to facilitate the decision of appeals on merits. The Tribunal concluded that the limitation period under section 254(2) did not apply to interim orders passed under Rule 12, as these are not final orders on appeal but procedural orders.
Conclusion:
The Tribunal held that the limitation imposed under section 254(2) was not applicable because the Tribunal's order was an interim order under Rule 12 of the ITAT Rules, not a final order under section 254(1). The Tribunal also clarified that where COD approval was awaited as of the Supreme Court's decision on 17/02/2011, the Tribunal's orders dismissing appeals for lack of COD approval must be recalled. Consequently, the miscellaneous application filed by the Department was allowed, and the Tribunal's order was recalled for adjudication on merits.
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2012 (12) TMI 1015
Issues Involved:
1. Transfer Pricing (TP) adjustments.
2. Non-recording of carry forward of short-term capital loss, business loss, and unabsorbed depreciation.
3. Issuance of refund with interest.
Summary of Judgment:
Issue 1: Transfer Pricing Adjustments
The primary issue pertains to the addition of Rs. 8,195,981 to the appellant's total income based on the provisions of Chapter X of the Income-tax Act. The Transfer Pricing Officer (TPO) and the Dispute Resolution Panel (DRP) equated the marketing support services rendered by the appellant with the fund management services rendered by Deutsche Asset Management (Asia) Limited. The TPO used internal controlled transactions to benchmark another controlled transaction entered into by the appellant with its associated enterprise. The TPO ignored the Net Cost Plus (NCP) mark-up computation for 'non-binding advisory services' submitted by the appellant and arbitrarily rejected it. The DRP upheld the TPO's decision, leading to the addition.
The Tribunal found that the services provided by the appellant were different from those provided by Deutsche Asset Management (Asia) Limited. The Tribunal accepted the Arm's Length Price (ALP) arrived at by the appellant and directed the Assessing Officer (AO) to delete the addition made. Grounds no. 1 to 7 were allowed in favor of the appellant.
Issue 2: Non-recording of Carry Forward of Losses and Depreciation
Grounds no. 8(a) & (b) pertain to the non-recording of carry forward of short-term capital loss of Rs. 2,80,215, business loss of Rs. 2,86,78,070, and brought forward depreciation of Rs. 21,02,819. The Tribunal directed the AO to verify the facts and pass an appropriate order in accordance with the law after allowing a reasonable opportunity to the appellant. Grounds no. 8(a) & (b) were treated as allowed for statistical purposes.
Issue 3: Issuance of Refund with Interest
Grounds no. 9 & 10 concern the direction to be given to the AO to allow a refund along with interest up to date. The Tribunal noted that the issue does not emanate from the orders of the authorities below and refrained from taking any decision on these issues.
Conclusion
The appeal was partly allowed, with the Tribunal directing the deletion of the TP adjustment and remanding the issue of carry forward of losses and depreciation for verification. No decision was made regarding the issuance of a refund with interest. The order was pronounced in the open Court on 12/12/2012.
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2012 (12) TMI 1014
Disallowance of deduction u/s 80IB(10) - Held that:- The assessee had claimed to have developed housing project and claimed such deduction. Revenue however, held belief that assessee was not the owner of the land and had developed the housing project for and on behalf of some other person. Tribunal relied on its own previous decision in case of Radhe Developers v. ITO [2007 (6) TMI 316 - ITAT AHMEDABAD] and ruled in favour of the assessee.
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9911796707
