|
Advanced Search Options
Case Laws
Showing 221 to 240 of 1442 Records
-
2014 (2) TMI 1225
Eligible profit u/s 10B - inclusion of export profits as claimed by the assessee - reveision u/s 263 - Held that: - Since the issue in question stands squarely decided in favour of the assessee by the ITAT Special Bench order in the case of Maral Overseas Ltd. (2012 (4) TMI 345 - ITAT INDORE ), which has not been disturbed by any superior authority, is binding on us. Respectfully following the same, we hold that on merits the assessee’s computation of eligible profit u/s 10B is to be allowed after including the export profits as claimed by the assessee. In view thereof, without going into technicalities of validity of sec. 263 we uphold the action u/s 263 and the issue on merits is decided in favour of the assessee
-
2014 (2) TMI 1224
Depreciation claimed by the trust - assessee is a trust registered u/s.12A - Held that:- The CIT(Appeals) followed the order of the Tribunal in the case of M/s. CMS Educational & Charitable Trust in [2013 (4) TMI 771 - ITAT CHENNAI] and allowed the appeal of the assessee placed reliance on the decisions of the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Tiny Tots Education Society reported as [ 2010 (7) TMI 377 - Punjab and Haryana High Court ] and CIT Vs. Market Committee, Pipli reported as [2010 (7) TMI 374 - Punjab and Haryana High Court ], wherein it has been held that claim of depreciation do not result in double deduction. The CIT(Appeals) applied the ratio laid down in the case of CIT Vs. Vegetable Products Ltd., reported as (1973 (1) TMI 1 - SUPREME Court ) and decided the issue in favour of the assessee.
-
2014 (2) TMI 1223
Disallowance of commission - non deduction of tds - amount paid by the assessee to non-resident agents outside India for the services rendered by them outside India - Held that:- The assessee had made payments to commission agents located in foreign countries. These foreign agents have rendered services in their respective countries and had received the commission. It is also evident that the foreign agents did not have any PE in India and there was nothing brought on record to show that the agreements between the assessee & the commission agents were entered in India.
In these circumstance the decision rendered in the case of Toshoku Ltd. (1980 (8) TMI 2 - SUPREME Court ) is squarely applicable wherein held that the commission agents, who are engaged in the services executed outside India, cannot be considered to carry on any business operations in India and therefore, provisions of section 9(1)(i) of the Act and Explanation-1A will not be applicable.
Similarly, in the case of GE India Technology Cen. (P.) Ltd (2010 (9) TMI 7 - SUPREME COURT OF INDIA) has held that the expression "chargeable under the provisions of the Act in Sec.195(1)" shows that the remittance has to be of trading receipt, the whole or part of which, is liable to tax in India. If tax is not so assessable, there is no question of tax at source being deducted. - Decided in favour of assessee
-
2014 (2) TMI 1222
Transfer Pricing adjustment - Retention of Zenith Infotech Ltd. as comparable company - Not granting an opportunity to the assessee with regard to acceptability of additional comparables and Internal TNMM - Held that:- Having heard the rival submissions and perused the orders of the lower authorities and the relevant material evidence brought on record in the light of the Rule 18(6) of the Income Tax Appellate Tribunal Rules 1963, in our understanding of law, internal TNMM should get precedence over the external TNMM comparables.
In the interest of justice and fair play, we restore this issue back to the files of the TPO. The TPO is directed to consider the internal comparable TNMM. The assessee is directed to provide necessary details to the TPO. Being fair to both parties, we allow the assessee to bring forth additional comparables and direct the TPO to accept/reject the same after necessary examination/verification as per the provisions of law. - Decided in favour of assessee for statistical purposes.
-
2014 (2) TMI 1221
Painting of individual houses / flats - Works contract services - Appellant paid service tax on painting of commercial complex and residential complexes but did not paid in respect of individual houses / flats - composite contract - State of VAT has been discharged on all the painting activities including individual flats - Circular No. B1/6/2005/TRU, dated 27-7-2005 - Held that:- the most important and crucial aspect to be decided is whether painting of a building amounts to repair or maintenance. On the one hand learned counsel would submit that it amounts to repair because if the painting is not proper, cracks can develop and there can be water seepage etc. Moreover, renovation or restoration is also covered and the definition also used the word “similar services”. There could be a view that painting can be covered under renovation and restoration also as far as the walls of the building are concerned.
The stand taken by the assessee that the assessee is liable to pay Service Tax treating the painting activity as a works contract cannot be found fault with at this stage subject to detailed consideration at the time of final hearing and therefore a case has been made out for waiver. - Stay granted.
-
2014 (2) TMI 1220
Reopening of assessment - disallowance of development expenses - Held that:- In the present case, apparent it is that all the facts relating to the debited expenses of ₹ 87,35,400 on account of development expenses were stated in the P&L a/c wherein, a sum of ₹ 35,00,000 was taken to the balance-sheet as provision for project development. All the facts were definitely available before the AO at the time of framing of the original assessment order. A look at the reasons recorded by the AO for the purpose of reopening makes it clear that the observations were made as if the successor AO was sitting in appeal over the original assessment order dt. 19th Dec, 2008; and it was sought to be suggested as to what was meant by a 'known liability' and as to whether the provision made on the basis of the quotations would qualify for liability or not. If was suggested that this amount, being not an expenditure, should have been added to the total income. It was further suggested that ₹ 33,48,915 was debited to the registration and stamp charges and sale of plot though registration charges are generally borne by the purchaser and not by the seller. Hence, according to the AO, these expenses were wrongly claimed by the assessee.
Evidently, all the observations by the successor AO were only of the expression of another opinion on the same set of facts. In the given circumstances, the Tribunal cannot be faulted in finding that the reassessment was based only on change of opinion and hence, unsustainable. - Decided in favour of assessee.
-
2014 (2) TMI 1219
Penalty levied u/s 221(1) - Penalty payable when tax in default - Held that:- On examination of the entire gamut of circumstances, the fact that the assessee cleared its tax, interest and balance interest dues, leaving not even a rupee outstanding in dues, much before the AO triggered the penal provisions only goes to prove the assessee's fair intention.
The fact that the assessee not being a habitual defaulter with no adverse history tainted on him goes to prove that the default was committed by it without any mala fide intention and under extreme dire circumstances.In these circumstances, we cannot subscribe to the views of the revenue authorities and sustain an action which is strictly technical. We, therefore, set aside the impugned order of the CIT(A) and direct the AO to cancel the penalty levied u/s 221(1) of the Income Tax Act. - Decided in favour of assessee
-
2014 (2) TMI 1218
Interest charged under section 234D - Retrospectivity - ITAT cancelling the interest charged - Held that:- Explanation (2) to section 234D of the Act has been made applicable to even the assessment year commencing before June 01, 2003. The only requirement in such a case would be that the assessment has to be completed after June 01, 2003. Therefore, after insertion of Explanation 2, the operation of section 234D of charging interest on the excess refund paid to the assessee is not restricted, making operation of such section effective from June 01, 2003.
This very issue came up for scrutiny before the Bombay High Court in the case of CIT v. Indian Oil Corpn. Ltd. [2012 (9) TMI 517 - BOMBAY HIGH COURT] has held that addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the interest was payable by the assessee even if it was received prior to June 01, 2003, so long as the proceedings of the concerned assessment year for which the refund was granted was completed after June 01, 2003.
We have respectfully chosen to follow the aforesaid decision of the Bombay High Court and, therefore, the order of the Tribunal in the instant case following the decision the case of Ekta Promoters (P.) Ltd. (2008 (7) TMI 452 - ITAT DELHI-E ) holding the provision of section 234D of the Act applicable only with effect from 2004-2005 and further holding that the interest under this section is not chargeable for earlier assessment years, even though the assessment has been framed after June 01, 2003, is not held to be a correct law and, accordingly, the Revenue's appeal deserves to be allowed.
Answering the substantial question of law in favour of the Revenue that in all those matters where excess refund has been granted by the Revenue, the provision of section 234D of the Act will apply and even in the case of earlier assessment years where the assessments were framed after June 01, 2003, the interest will be chargeable in accordance with law - Decided against assessee
-
2014 (2) TMI 1217
Addition u/s 69A - CIT(A) deleted the addition - Held that:- There is no dispute about the fact that in the immediate preceding year AO has made the addition by applying peak credit theory in respect to the cash deposit in the same bank account and there was no change of circumstances during the year under appeal, therefore we feel that Ld. CIT(A) was justified in directing the AO to follow the same theory of peak credit while quantifying the undisclosed income of the assessee. Therefore we are not inclined to interfere with order passed Ld. CIT(A) and the same is hereby upheld. - Decided against revenue
-
2014 (2) TMI 1216
Entitlement for the benefit of sub-section 6 of section 115JB to assessee to be a Special Economic Zone - whether assessee, functioning from Falta Export Processing Zone, admittedly a Software Technology Park, was eligible for claiming the benefit of sub-section 6 of section 115JB? - Held that:- A reading of the sub-section 6 of section 115JBwould clearly show that section 115JB will not apply to a business carried on by an entrepreneur or a Developer in a Unit or Special Economic Zone. The Sub-section does not say that the Unit has to be functioning from a Special Economic Zone. The word ‘Unit’ has not been defined under the Income Tax Act. Disjunctive expression ‘or’ has been used by the legislature between the words unit and Special Economic Zone. Implication can only be that there is no condition that a unit has to function in an SEZ for claiming the benefit of sub-section (6). Since sub-section 6 of section 115JB of the Act was inserted by Special Economic Zone, 2005, the meaning of the term ‘Unit’ given in the said Act will, in our opinion, be relevant since such word is not defined in the Income Tax Act.
The necessity to have a physical location inside an SEZ is not essential for applying the exclusionary clause of sub-section 6 of section 115JB of the Act. One of the grounds taken by Revenue says that assessee has not claimed any exemption under section 10AA of the Act for applying Section 6 of Section 115JB of the Act. We do not find any such requirement in sub-section 6 of section 115JB of the Act. Assessee was also governed by the same Rules as applicable to the Special Economic Zone and reported to the same authority mentioned under the Special Economic Zone. Therefore, ld. CIT(Appeals), in our view, was right in holding that assessee was eligible to claim the benefit of sub-section 6 of section 115JB of the Act. - Decided in favour of assessee
-
2014 (2) TMI 1215
Transfer pricing adjustment - whether in case of availability of internal CUP method, TNMM could not be applied as per CIT(A) - Held that:- We are in agreement with the observations of Ld. CIT(A) that in case of availability of internal CUP method, TNMM could not be applied. What was necessary was that assessee should have been allowed the relief as per difference in the activities in the services rendered by it to related and unrelated parties. The said difference has been described in the tables submitted by the assessee to the TPO vide letter dated 29/11/2004. However, TPO did not discuss those figures in his order but these figures are discussed in the order of Ld. CIT(A). The TPO did not point out any defect in such calculation of the assessee. It has been described in the above submission that assessee had to incur additional cost to the tune of 0.29% in relation to services rendered by it to unrelated parties when the same is compared to the similar services rendered to the related parties. In view of these facts, we are of the opinion that Ld. CIT(A) was right in granting relief to the assessee and we decline to interfere in his findings on this issue.- Decided in favour of assessee
Disallowance under section 14A - CIT(A) deleted the entire addition - Held that:- Respectfully following the order of the Tribunal in assessee’s own case for A.Y 2001-02, we hold that ₹ 10,000/- should be disallowed under section 14A of the Act. Accordingly this ground of the revenue is partly allowed.
Disallowance in respect of Club Membership Fees - CIT(A) deleted the entire addition - Held that:- This issue is covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of CIT vs. United Glass Manufacturing Co. [2012 (9) TMI 914 - SUPREME COURT] holding that club membership fees for employees incurred by the assessee is business expense under Section 37 - Decided in favour of assessee.
Addition considered as capital in nature in respect of software, support services, repairs and maintenance - CIT(A) deleted the entire addition - Held that:- Similar disallowance was allowed in respect of assessment year 2001-02 to held that such expenditure was revenue expenditure.- Decided in favour of assessee.
-
2014 (2) TMI 1214
Clubbing of Income - whether Punjab Timber Trading Company is a bogus proprietary concern? - Held that:- In the case before us, it has not been shown that any material was being purchased form M/s Punjab Plywood Industries or any amount has come from that firm. It is also not brought on record that business was conducted from the same premises. It is only on the statement recorded during the search where Smt. Meena Garg i.e the assessee has said that she was not running any business concern in the name of M/s Punjab Timber Trading Co but later on in respect of question No. 24, during the assessment proceedings she clearly stated that she was confused and nervous. Question No. 24 and its answer reads as under;-
“Q24. In the statement recorded on the date of search you have specified that you are not filing any return of income or have any business concern. Please clarify as to why you had stated so when today you are doing timber business.
Ans. I denied doing any business as I was nervous and thought the questions being asked related to my husband’s business.”
Every person during the search sometimes nervous. Further, we find that Revenue has not shown whether any capital has moved from Punjab Plywood Industries to M/s Punjab Timber Trading Company. In the absence of such nexus, there is no provision to hold that the firm i.e. M/s Punjab Timber Trading Co run by the assessee was ‘benami’ of M/s Punjab Plywood Industries. Therefore, we set aside the order of Ld. CIT(A) and hold that M/s Punjab Timber Trading Company is not a bogus proprietary concern. - Decided in favour of assessee.
-
2014 (2) TMI 1213
Unexplained investment taxable u/s. 69 - CIT(A) deleted the addition - Held that:- We find that the FAA has given a categorical finding of fact that the property was not owned by the assessee in the year under consideration, whereas order of the AO is silent on this issue. DR could not controvert the fact narrated by the FAA. From the accounts of the assessee it is clear that amount in question was opening balance for the year under appeal. Therefore, no addition could have been made for the year. We are of the opinion that the order of the FAA does not suffer from any infirmity - Decided in favour of assessee
Addition made u/s. 23 - CIT(A) deleted the addition - Held that:- As assessee did not own three properties as alleged by the AO. As the order of the AO is not based on facts and the FAA has decided the issue considering the factual position, so confirming his order we decide ground no. 2 against the AO.
Deemed dividend u/s. 2(22)(e) - Held that:- Advance received by the assessee for purchase of flat could not be treated deemed dividend. We find that in the matter before us, amount received by the assessee was meant for purchasing a flat. Therefore, respectfully, following the order of the coordinating bench in the case of wife of the assessee, Mrs. Amisha B Koradia we reverse the order of the FAA and decided ground no. 1 in favour of the assessee.
Disallowance of interest - Held that:- There is no dispute about the fact that the assessee has overdrawn from the partnership firm M/s Sagar Construction; therefore, the interest paid to the Sagar Construction for the debit balance in the capital account is an allowable expenditure against the business income of the assessee and particularly against the interest/remuneration received from the partnership firm. - Decided in favour of assessee.
-
2014 (2) TMI 1212
Capital gains from transfer of industrial property - Held that:- Section 50C of the Act applies only to capital asset being land or building or both but it cannot apply to lease rights in a land. Since the assessee has transferred the lease right for 99 years in the plot and not ownership in land itself, the provision of Section 50C cannot be invoked.
Therefore, full value of consideration in this case has to be taken at ₹ 42.25 lacs. The decisions relied on by the assessee in its written submissions also support our above finding. - Decided in favour of assessee.
-
2014 (2) TMI 1210
Revision u/s 263 - Held that:- In the present case, from para 3 of the impugned order, it is noticed that the notice dt. 9th Jan., 2013 under s. 263 of the Act was issued only on receipt of the proposal under s. 263 of the Act from the ITO, Ward-1(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2, Sawai Madhopur.
It is well-settled that the learned CIT while exercising the revisionary powers under s. 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. Therefore, before taking any action, learned CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under s. 263 of the Act, but not of the learned CIT. Therefore, issuance of notice under s. 263 of the Act on the basis of the proposal made by the ITO was void ab initio; We, therefore, set aside the same. - Decided in favour of assessee
-
2014 (2) TMI 1209
Disallowance of interest u/s 14A read with rule 8D - CIT(A) deleted the disallowance in part - Held that:- CIT(A) observing that the facts are identical to the facts of the Assessment Year 2005-06, by following the order of the Tribunal passed in the case of the assessee itself in Assessment Year 2005-06 has restricted the disallowance u/s 14A to 2% of the dividend income and deleted the balance amount of disallowance. - Decided against revenue
Disallowance being 50% of payment made to related party towards fees and legal charges - CIT(A) deleted the disallowance - Held that:- The genuineness of the payment is not in dispute. The Assessing Officer after observing about the loss incurred by the assessee company has brought no material on record after making investigation to show that the assessee has not received the services for which payments were made by the assessee. Rather, on the other hand, the allowance of deduction at the rate of 50% shows that the Assessing Officer also agreed that services of the staff of the payee company were utilized by the assessee company for its business purpose. No material was brought on record to show that the consideration for services received by the assessee was so excessive as to warrant any disallowance out of the same. It is also observed that the amount of consideration paid was as per Memorandum of Understanding entered into by the assessee with the payee company. In view of the above facts and circumstances, we do not find any good reason to interfere with the order of the Ld. CIT(A) - Decided against revenue
Disallowance u/s 36(1)(va) read with section 2(24)(x) being the employees’ contribution to Provident Fund not deposited within the stipulated time - Held that:- Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT ) held that with respect to the sum received by the assessee firm from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va).the issue was covered in favour of the Revenue by the above cited decision of the Hon’ble Gujarat High Court. Therefore, we set aside the order of the Ld. CIT(A) and restore back the order of the Assessing Officer. - Decided in favour of revenue
-
2014 (2) TMI 1208
Deemed dividend u/s 2(22) - Held that:- Thus issue is squarely covered in favour of assessee as in the case of Mr. Anil Bansal [2013 (8) TMI 514 - ITAT DELHI] under similar facts and circumstances, the Hon'ble Tribunal has considered similar transactions as Current Account transactions and has not as deemed dividend.
The facts in the present case are similar as in the present case also. Credit balances remained in the period 2.8.2005 to 27.8.2005. For the rest of the periods the account remained in debit and that too with much larger amounts than the amounts where account was in credit. Therefore respectfully following the order of the Tribunal we allow this ground of appeal. - Decided in favour of assessee
-
2014 (2) TMI 1207
Revision u/s 263 - FCCB funds diverted to the M/s Reliance Info Investment without charging interest - Commissioner held that the interest free fund would be deemed to be transfer of an asset in view of the provisions of sections 60 to 63 of the Act - Held that:- Tribunal has considered all the contention of the department regarding applicability of section 60 to 63 of the Act to the interest income and then gave a finding that the issue was debatable and provisions of section 263 could not be invoked when the AO has already conducted an enquiry and taken one of the possible view. There is no quarrel on the point that for the year under consideration, the AO conducted an enquiry on the issue therefore we do not find any reason for distinguishing either the fact or the finding of the Tribunal on the issue for the A.Y. 2007-08.- Decided in favour of assessee
Mark to market loss/gain - AO disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging - Held that:- It is clear that the Tribunal while decided the issue for the A.Y. 2007-08 has also considered the CBDT instruction no. 3/2010 which has been heavily relied upon by the Commissioner as well as the ld. DR. We further note that the AO has examined this issue and disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging and therefore it is manifest from the record that the issue has been examined by the Assessing Officer and taken a possible view. The Tribunal on the identical facts has decided this issue by holding that the view of the Commissioner cannot be countenanced with. Accordingly, we do not find any reason to take a different view from that of already taken by the Tribunal for the A.Y. 2007-08 - Decided in favour of assessee
-
2014 (2) TMI 1206
TDS u/s 194C - Non deduction of TDS - payment for sub-contract works - Held that:- Since the payees / recipients i.e. G. Ramesh and Ramesh Kotian have already shown these amounts in their respective books of account audited under section 44AB of the Act; declared and offered the same to tax in their returns of income for the relevant period, thus by virtue of the amendment to the provisions of section 40(a)(ia) of the Act by insertion of the second proviso to section 40(a)(ia) of the Act w.e.f. ;1.4.2013, the provisions of section 40(a)(ia) of the Act would not be attracted to the payments made by the assessee i.e. Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000. This view of ours, is in accordance with the decision of the co-ordinate bench of this Tribunal in the case of Ananda Markala (2014 (12) TMI 613 - ITAT BANGALORE) wherein it was held that the insertion of the second proviso to section 40(a)(ia) of the Act should be read retrospectively from 1.4.2005 and not prospectively from 1.4.2013. In this view of the matter, the provisions of section 40(a)(ia) of the Act is not attracted to the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 since the object of introduction of section 40(a)(ia) of the Act is achieved for the reason that the payees / recipients have declared and offered to tax the payments received from the assessee in their respective hands.
As regards the issue of non-furnishing of Form No.26A, we are of the view that since the second proviso to section 40(a)(ia) of the Act is held to be retrospective in operation w.e.f. 1.4.2005, similarly, Form 26A was to be filed for an assessee not to be held as an assessee's in default as per proviso to section 201 of the Act. In all fairness, the assessee in the period under consideration i.e. Assessment Year 205-06 could not have contemplated that such a compliance was to be made and therefore in the interest of equity and justice we set aside the order of the learned CIT (Appeals) and remit the matter to the file of the Assessing Officer directing the Assessing Officer to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 4,23,96,500; being the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 after affording the assessee adequate opportunity to file Form No.26A and only after due verification of whether the aforesaid two payees / recipients have reflected the same receipts in their books of account and have offered the same to tax. In these circumstances, we hereby set aside the order of the learned CIT (Appeals) to the file of the Assessing Officer only for the limited purpose as directed above. - Decided in favour of assessee for statistical purposes.
-
2014 (2) TMI 1205
Addition u/s 68 - receipt of accommodation entry - Held that:- ITAT and CIT(A) concluded that AO failed to show that the transaction for purchase and sale of shares was bogus and the appellant paid cash to the broker for availing accommodation entry in the form of sale proceeds of shares. Suspicion, strange coincidences and grave doubts, how so ever strong it may be, cannot take place of legal proof. Therefore, the AO erred in treating the entire transaction of long term capital gains as a sham transaction and bring it to tax as unexplained cash credit u/s 68 of the Income tax Act, 1961.
The findings as concurrently recorded by the CIT(A) and the ITAT, that addition under Section 68 of the Act was not sustainable, remain essentially in the realm of appreciation of evidence. The Appellate Authorities have returned the finding of fact in favour of the assessee after due appreciation of evidence on record, on relevant considerations, and on sound reasonings. The finding neither appears suffering from any perversity nor is of such nature that cannot be reached at all. - Decided in favour of assessee.
............
|
9911796707
