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Showing 221 to 240 of 1328 Records
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2014 (4) TMI 1109
Validity of assessment u/s 153C - Held that:- There is clear non-fulfillment of conditions laid down in Section 153C of the Income Tax Act, 1961, as there is no recording of satisfaction by the Assessing Officer that undisclosed income belongs to any person other than the person who was searched which is a condition precedent. Settled position of law has been applied. - Decided in favour of assessee
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2014 (4) TMI 1108
Revision u/s 263 - undisclosed total turnover/receipts - Held that:- AO passed the assessment order on 19.12.2007 u/s. 143(3) of the Act. He has gone through the survey report which was conducted at business premises of the assessee on 27.3.2006 and the basis for issuing notice u/s. 143(2) is the survey operation in the case of the assessee u/s. 133A of the Act. The AO categorically mentioned in para 4 of his order that during the course of survey Sri T. Srinivasa Rao, Managing Partner of the assessee stated that the total turnover/receipts for FYs 2004-05 and 2005-06 will be around ₹ 70 lakhs and also stated that for FY 2004-05 relevant to A.Y. 2005-06, the turnover/receipts are ₹ 20 lakhs and for FY 2005-06 relevant to A.Y. 2006-07, the turnover/receipts are ₹ 50 lakhs. It means that the AO had gone through the survey report and after that only he had completed the assessment.
The AO being quasi-judicial authority, exercised the powers vested in him according to the law and arrived at a conclusion that the assessee has properly disclosed the receipts in its books of account and concluded that no addition is warranted towards undisclosed receipts and he made the addition of ₹ 1,08,091 towards the discrepancies in bills and vouchers produced by the assessee. The CIT u/s. 263 proceedings not satisfied with the addition made by the AO and he was of the opinion that the income offered by the assessee is to be brought to tax.
In our considered opinion, the first requirement viz., that the assessment order passed by the AO is erroneous is absent in this case. In coming to the conclusion of the CIT u/s. 263 proceedings that ₹ 50 lakhs offered by the assessee has to brought to tax is not supported by any positive material and there is retraction by the assessee. Being so, in our opinion, the AO's order is to be upheld. The reason given by the CIT was that the retraction made by the assessee was delayed inordinately. In our opinion, though there is a delay in retraction by the assessee for going back from the offer made by the assessee, there is no material whatsoever to bring the additional income to tax. Thus we are inclined to annul the order passed by the CIT u/s. 263 of the Act. - Decided in favour of assessee
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2014 (4) TMI 1107
Deduction claimed u/s 36(1)(viia) - amount of Provision made in the books of account for bad and doubtful debts - Held that:- In the immediately preceding assessment year of 2008-09 also the Revenue had denied the claim of the assessee u/s 36(1)(viia) of the Act by restricting it to the extent of the Provision for bad and doubtful debts actually made in the account books. The Tribunal, after considering the rival stands as also the various authorities cited at Bar came to conclude that the deduction sought to be claimed by the assessee u/s 36(1)(viia) of the Act was liable to be restricted to the extent of the Provision for bad and doubtful debts actually made in the account books. - Decided against assessee
Addition on account of accrued interest income relating to ‘Non Performing Assets’ - Held that:- As decided in Asst. Commissioner of Income Tax Versus The Omerga Janta Sahakari Bank Ltd. [2014 (12) TMI 355 - ITAT PUNE ] it was legitimate move to infer that interest income thereupon has not “accrued”- thus, there was no infirmity with the decision of the CIT(A) in holding that the interest income relatable on NPA advances did not accrue to the assessee – Decided against revenue.
Deduction representing amortization of premium paid on Government Securities - Held that:- CIT(A) made no mistake in allowing the claim of the assessee for deduction representing amortization of premium paid on Government Securities under the HTM category holding that the same was claimed as per the relevant RBI guidelines and even the CBDT has issued instructions to allow the same. – Decided against revenue.
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2014 (4) TMI 1106
Transfer pricing adjustment in respect of payment made by the assessee to its AE for availing IT support services - CIT(A) deleted the addition - Held that:- Addition made by way of TP adjustment was not sustainable as it was not permissible under Transfer Pricing Regulation to make TP adjustment on account of any international transaction without applying any one of the prescribed methods. Reliance on this regard was placed by the Tribunal on the case of Mccan Ericsson (India) (P.) Ltd. Addl. CIT [2012 (7) TMI 728 - ITAT, DELHI] wherein the TP adjustment made by the A.O./TPO by taking value of certain services at “nil” was held to be unsustainable by the Tribunal. Keeping in view these decisions of co-ordinate Bench of this Tribunal and having regard to all the relevant facts of the case as summarized by the ld. CIT(A) in his impugned order, we hold that the addition made by the A.O./TPO on account of TP adjustments in respect of the international transactions of the assessee company with its AE involving availing of IT support services was not sustainable either in law or on the facts of the case and the ld. CIT(A) was fully justified in deleting the same. We, therefore, uphold the impugned order of the ld. CIT(A) giving relief to the assessee and dismiss this appeal filed by the Revenue. - Decided in favour of assessee.
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2014 (4) TMI 1105
Additional depreciation u/s. 32(1)(ii) - whether assessee has not satisfied the condition of engaging in the business of manufacture or production of any article or thing?- Held that:- Generation of electricity is a manufacturing activity. The assessee is involved in the manufacturing activity and fulfills the conditions as laid down under section 32(1)(iia). The Government vide Finance Act, 2012 has amended the provisions of section 32(1)(iia) to include the business of generation or generation and distribution of power, eligible for benefit under section 32(1)(iia). Although the said amendment is with effect from 1.4.2013 but it gives impetus to the view that generation of electricity is a manufacturing process and qualifies for the benefits under section 32(1)(iia). See ACIT Vs. M.Satishkumar reported as (2012 (11) TMI 215 - ITAT CHENNAI).
Rate of depreciation on civil and electrical fittings - Held that:- We find that this issue has also been dealt with in the case of R.Ramanathan Vs. DCIT (2011 (8) TMI 1143 - ITAT CHENNAI), wherein the Tribunal has held that wind mills are fabricated/erected on a specialized foundation and the civil and electrical components of the structure are indivisible parts of the wind mill parts as a whole. As such, the civil and electrical components of the wind mill structure cannot be dis- associated from the sole and substance of the wind mill and cannot be given a separate treatment for depreciation and directed the assessing authority to grant depreciation @ 80% on the whole cost of wind mill including civil and electrical components.
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2014 (4) TMI 1104
Treating gains from sale of shares as 'Income From Business' instead on 'Capital Gains' - Held that:- The purchase of IPO is mostly done by the investors as there is less risk of loss. Further, the other attendant facts like; the assessee has utilized its own funds and has shown the shares under the head investment and most important that exactly similar nature of transactions have been held by the Department to be capital gain not only in the earlier assessment years but also in the subsequent assessment year. Thus, there has been consistency which has been accepted. This goes to show that the intention of the assessee was only for the purpose of making investment and not for entering into any venture of trade. Under these facts and circumstances, we hold that the gain arising out of sale of shares should be assessed as capital gain and not as a business income. The fundings of the Assessing Officer and the learned Commissioner (Appeals) are based on various decisions which cannot be held to be applicable universally in all the cases, because in such kind of transaction, each fact of the case has to be analysed, depending upon the intention of the assessee and also the other attendant circumstances. - Decided in favour of assessee
Disallowance u/s 14A - Held that:- on a perusal of the relevant material on record, it is seen that the assessee has only debited sum of ₹ 2,170 as expenditure which is on account of bank charges and accountant fees. These expenditures cannot be, in any manner, said to be attributable for earning of the exempt income. Thus, when there is not much expenditure claimed in the Profit & Loss account, then there is no question of disallowance under section 14A. - Decided in favour of assessee
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2014 (4) TMI 1103
Undisclosed source of cash deposited in the Vijaya Bank account - it is the case of the assessee that such amounts cannot be treated as income in his hands as his only income is the margin/commission in the auction proceedings - Held that:- The assessee is making only pleadings before lower authorities that he is an auctioneer; his income is only the margin/commission; and the deposits in the bank account cannot be treated as his income, etc. It is the duty of the assessee to prove before the assessing authority that the cash deposits reflected in his Vijaya Bank account in fact related to the monies received from the persons who participated in the auctions. The responsibility cannot be discharged by just explaining that he is carrying on the business of auctioning. An auctioneer is in fact bound to keep meticulous accounts and particulars regarding his auction activities. Inspite of that, the assessee did not produce any details before the assessing authority.
The result is that the assessee could not explain to the satisfaction of the Assessing Officer, the source of cash deposited by him in the Vijaya Bank account. The cash deposits reflected in the Vijaya Bank account always remained unexplained. In these circumstances, the only course of action available to the Assessing Officer is to treat those cash deposits as unexplained credits. Therefore, we find that the Assessing Officer has rightly made additions in the hands of the assessee.
During the course of hearing, the learned counsel has argued that even if additions were called for, the gross amounts of cash deposits could not be added for the reason that the assessee being an auctioneer, is entitled only for margin/commission. The learned counsel also contended that alternatively the peak amount alone should have been added. But, we are not in a position to accept the above alternative grounds, because the facts of the case do not justify even those alternative grounds. The basic reason for addition is the absence of evidence and details with the assessee to prove the genuineness of the source of deposits. When that is the case, the argument of margin/commission is not sustainable. As the assessee has not produced any of the details regarding the flow of funds, it is also not possible to adopt the peak amount theory. Thus we find that the lower authorities are justified in making and confirming the additions in the hands of the assessee - Decided against assessee
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2014 (4) TMI 1102
Deduction u/s 80P(2)(a)(i) denied - AO took the view that the Assessee is a primary co-operative bank and therefore provisions of Sec. 80P(4) are applicable in the case of the Assessee - Held that:- Assessee has not to be regarded to be a primary co-operative bank as all the three basic conditions are not complied with, therefore, it is not a co-operative bank and the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee is entitled for deduction u/s 80P(2)(a)(i). We, therefore, confirm the order of the CIT(A) allowing deduction u/s 80P(2)(a)(i) to the assessee u/s 80P(2)(a)(i) on the income generated for providing banking or credit facilities to its members. - Decided against revenue
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2014 (4) TMI 1101
Availing simultaneous alternative remedy while filing an appeal - property dispute - administration of the temple - Held that:- The appellant having availed the alternative remedy available under the Act, however, approached this Court by way of these Civil Appeals. In our opinion, the appellant cannot be permitted to avail two remedies simultaneously, and such conduct of the appellant is abuse of process of Court. It is no doubt settled law that mere availability of alternative remedy cannot be a ground to reject the relief in a Public Interest Litigation, but in the facts and circumstances of the case, namely the history of the case, right from 15th century, the long standing litigation, the voluminous record, etc. involving disputed questions of facts and law, we are of the considered opinion that adjudication of such disputes is not possible in a Public Interest Litigation, and the remedy is to get such disputes adjudicated by a fact finding authority as enumerated under the Act, which remedy is not only alternative, but also effective, because the parties can put a quietus to the litigation once for all.
Hence, in view of our above discussion, we are of the considered opinion that the High Court, by the impugned order, was justified in relegating the parties to the Assistant Commissioner, before whom the applications are pending adjudication. The appellant having got impleaded himself in the applications before the Assistant Commissioner and having invited an order from the High Court, now cannot be permitted to question the said order of the High Court.
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2014 (4) TMI 1100
Deduction u/s 54EC denied - transfer - Held that:- It is also not in dispute that the condition was to pay full and final consideration before carrying out the development activity, and the transferee developer did not pay the complete consideration. In any case, the fact that the possession envisaged in the agreement dated 13.09.2007 was a conditional possession is not disputed. Therefore, in such a situation, it could not be said that the development agreement of such type would be an agreement which is envisaged to trigger the operation of section 53A of the Transfer of Property Act. On this count itself we find that there is no justification for the Revenue to establish the date of transfer on the strength of section 2(47)(v) of the Act. Hence, we are unable to uphold the stand of the Revenue on this count also.
On the contrary, since there is no dispute to the assertions of the assessee that actual possession of the property was given in March, 2008 as confirmed by the developer in its co1n4firmation letter dated 19.11.2010, we deem it fit and proper to hold that the date of transfer has to be understood as 01.03.2008 and accordingly, the period available with the assessee to make the investment qualifying for deduction u/s 54EC has to be calculated accordingly. In this view of the matter, the investments in the bonds of REC Ltd. made by the assessee on 22.08.2008 is within the period of six months from the date of transfer as prescribed in section 54EC of the Act and accordingly the assessee is eligible for deduction u/s 54EC of the Act also - Decided in favour of assessee
Addition to taxable income - addition on account of the land development agreement entered by the assessee with Rudra Buildcon Pvt. Ltd. apart from the cash consideration, the developer also offered to the assessee a separate tenement which was to be constructed by the developer on its own cost - Held that:- In the present case, assessee was owner of land at 799/A, Bhandarkar Road, Pune and assigned the development rights in such land to a builder M/s Rudra Buildcon Pvt. Ltd. vide agreement dated 13.09.2007. Apart from receiving the consideration price in cash, assessee was also entitled to receive from the developer a tenement constructed over a portion of land and such construction was to be undertaken by the developer at his own cost. While undertaking development and construction the developer was to provide an alternative accommodation to the assessee for his use and the Assessing Officer has pointed out that a sum of ₹ 2,55,000/- was spent by the developer on account of such alternative accommodation. In our considered opinion, the taxability of the aforesaid sum has to be seen as a part and parcel of the transaction resulting in assessee getting possession of the constructed tenement from the developer. Ostensibly, there is no justification for the Revenue to say that it is a revenue receipt because it is nobody’s case that the arrangement with the developer undertaken by the assessee is in the course of any business activity. Therefore,the Assessing Officer shall re-work the total income of the assessee on the impugned aspect in the aforesaid light. - Decided in favour of assessee for statistical purposes.
Addition invoking section 14A - Held that:- the proposition advanced by the learned counsel for the assessee cannot be disputed, so however, we do not find that the assessment order in the present case suffers from the vice that is sought to be made out by the assessee. In-fact, the Assessing Officer has noted that assessee has incurred expenses on account of telephone, printing stationery, vehicle running, account writing charges, etc. and he rightly concluded that certain expenses have been incurred for earning of excepted income. Having regard to the facts and circumstances of the present case and the discussion in the order, in our view, the requisite satisfaction mandated in section 14A(2) of the Act stands fulfilled in the present case and the action of the Assessing Officer in invoking section 14A of the Act is hereby affirmed. - Decided against assessee
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2014 (4) TMI 1099
Disallowance u/s. 40(a)(ia) - non- deduction of TDS on terminal handling charges - Held that:- As carefully perusing the orders of the lower authorities and the Circular of the Board No.723 dated 19/09/1995 the Circular relates to tax deduction at source for payment made to foreign shipping companies and at point No.5 the CBDT has clarified that since the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of section 194C and 195 will not apply. - Decided in favour of assessee.
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2014 (4) TMI 1098
Rectification of mistake - Held that:- As concerning invocation and application of section 50C, was pressed by the ld. AR during hearing, raising arguments in its respect. There has thus indeed occurred a mistake by the tribunal in not adjudicating the assessee’s ground # 1. We, accordingly, have no hesitation in, acceding to the assessee’s prayer, recalling the assessee’s appeal, since disposed of per the impugned order, for being heard afresh and decided in respect of the assessee’s ground no. 1, which raises an issue separate and distinct from Ground # 2 adjudicated by the tribunal.
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2014 (4) TMI 1097
Disallowance of interest - interest free advances given by the assessee to its other group companies - CIT(A) deleted the disallowance - Held that:- The relevant advances having been given by the assessee to its subsidiary company wholly and exclusively for the purpose of its business, the disallowance of interest attributable to the said advance was not justified. Following this Third Member decision for A.Y. 1989-90, the Tribunal has consistently decided a similar issue in favour of the assessee in the subsequent years up to A.Y. 2002-03. As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that of the earlier years, we respectfully follow the decision rendered by the Tribunal in assessee’s own case for the earlier years and uphold the impugned order of the ld. CIT(A) deleting the disallowance - Decided in favour of assessee.
Disallowance of interest amount on share application pending allotment - A.O. alleging that there was diversion of borrowed funds by the assessee for non-business purpose - CIT(A) deleted the disallowance - Held that:- In A.Y. 1995-96, it was held by the Tribunal that there being no diversion of interest bearing funds for non-business purpose as alleged by the A.O., there was no justification in making any disallowance on account of interest paid on the borrowed funds. It was noted by the Tribunal that the share application money was finally returned to the assessee with interest @ 19% and the interest so received was duly offered by the assessee in the relevant year. A similar view has been taken by the Tribunal in the subsequent years i.e. assessment years 1996-97 to 2002-03. As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to the earlier years, we respectfully follow the orders of the Tribunal for the said years and uphold the impugned order of the ld. CIT(A) giving relief to the assessee on this issue. - Decided in favour of assessee.
Disallowance of expenditure on the replacement of carpets - Held that:- A similar disallowance on account of expenditure incurred by the assessee on replacement of carpets was made by the A.O. treating the same as capital expenditure in the earlier years and the Tribunal consistently gave relief to the assessee by holding the expenditure on replacement of carpets as revenue expenditure - Decided in favour of assessee.
Expenditure incurred on the replacement of linen - CIT(A) treated as Revenue expenditure instead of capital expenditure - Held that:- This issue is similar to the issue relating to the assessee’s claim for deduction on account of expenditure incurred on replacement of carpets and the same has also consistently decided by the Tribunal in favour of the assessee in earlier years. Respectfully following the orders of the Tribunal in assessee’s own case for the earlier years upto A.Y. 2002-03 on a similar issue, we uphold the impugned order of the ld. CIT(A) allowing the deduction claimed by the asssessee - Decided in favour of assessee.
Transfer pricing adjustments - Held that:- No justifiable reason to interfere with the impugned order of the ld. CIT(A) deleting the TP adjustment made by the A.O./TPO in respect of the international transactions involving availing of sales promotion services by the assessee from its AE in US.
CIT(A) has erred in excluding operating fee and receipt from Taj Lounge from total receipts of business for computing deduction u/s 80HHD without appreciating that the said receipt being part of total receipts of the business cannot be excluded from the purview of total receipts for the purpose of computation of deduction
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2014 (4) TMI 1096
Adjustment in the operating margin of CDR unit - addition by the AO which was by taking average operating margin @ 23.72% while the CIT(A) directed the AO to take this margin @ 20.72% and confirmed the addition - Held that:- As after excluding the 5 comparables, the cash PLI of 9 companies as computed by the ld. AR and submitted before us, copy of which is given to the ld. DR, comes to 26.78%. In the Assessee’s case, the cash operating profit has been computed @ 22.45%. Therefore, the difference comes only 4.33% which is less than 5%. We noted that as per the proviso to Sec. 92C where more than one price is determined by the most appropriate method, the Arm’s Length Price has to be taken to be the arithmetic mean of such prices. We also noted that the said proviso during the impugned assessment year also provides that at the option of the Assessee the price which may vary from the arithmetic mean by an amount not exceeding 5% of such arithmetic mean be taken to be the Arm’s Length Price. Since the difference in the case of the Assessee is only 4.33% which is less than 5%, therefore, in our opinion, no addition on this account can be sustained in the case of the Assessee. We, accordingly, set aside the order of CIT(A) and delete the addition sustained by CIT(A) - Decided in favour of assessee.
Market cost adjustment of 10.96% to the comparable uncontrolled price - Held that:- In our opinion, no interference is called for in the order of CIT(A). CIT(A) has rightly directed the AO to allow the adjustment @ 10.96% for marketing expenses after verifying the correctness of the data submitted by the Assessee for allowing the relief. Similar direction, we noted, has been given by CIT(A) in A.Y 2004-05 and 2005-06 and has been confirmed by this Tribunal. The ld. DR could not bring any cogent material or evidence before us which may compel us to take a different view than what has been taken by the CIT(A). - Decided against revenue
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2014 (4) TMI 1095
Restoration of appeal - Held that:- As can be seen from the reproduced letter for adjournment that the appellant is stating that they have filed an application before Honble High Court of Bombay, but has not attached any document / petition or the application, for us to peruse and come to conclusion, that the issue involved in that application and in the final order passed by the bench is the same.
In view of the foregoing, we dismiss the application for restoration of appeal as devoid of merits.
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2014 (4) TMI 1094
L.T capital loss on extinguishment in the value of asset - Held that:- U/s. 560(5) of the Companies Act, 1956, the final procedure for striking a company’s name off the registrar is to publish a notice thereof in the official gazette and on publication in the official gazette of notice referred to in section 560(3) of the Companies Act, 1956, the company shall stand dissolved. It is only on such publication that the assessee’s right in the shares get extinguished and prior to that point of time, it cannot be said that there was any transfer to invoke provisions of section 45 of the I.T. Act, 1961. In our view, reference to provisions of section 46(2) of the Act are not appropriate, as those provisions contemplate a situation of receipt of money or other assets in the process of liquidation of a company. Admittedly, there was no receipt of money or other assets on liquidation by the assessee and therefore provisions of section 46(2) of the Act were not applicable. We are therefore of the view that the revenue authorities were justified in rejecting the claim of the assessee under the head ‘long term capital loss’. - Decided against assessee.
Disallowance of refurbishing / warranty claims - non deduction of tds - Was there an obligation on the part of the Assessee to reimburse the cost of refurbishing the products sold by Mantrra Inc.? - Held that:- Perusal of the refurbishing statement shows it refers to several heads of expenses but none of the head of expense is “value of the cooker returned by customer”. Besides the above it includes expenses on retrieving returned cookers to make them fit for sale again, rent for storing returned cookers, costs of shifting the returned cookers, travelling expenses, Apartment rent paid for workmen who visited from India to refurbish the returned cookers. It is clear from these bills that none of the above expenditure can be attributed to the Assessee as per any article in the agreement between Assessee and MI. These expenses are clearly that of MI for which the Assessee has procured a Product Liability Insurance cover at its cost in favour of MI. As we have already seen and as rightly held by the revenue authorities the only obligation of the Assessee was when cookers which are found to be defective and unacceptable and hence returned to the Assessee, to give credit or replace the defective cookers. This is the only legal liability of the Assessee as per the terms of the Agreement. The claim made by the Assessee for deduction on account of refurbishing warranty is therefore held to be not sustainable as it is not the liability of the Assessee.
Addition made by way of imputed interest - Held that:- The contention of having actually not earned any income cannot come to the rescue of the assessee in this scenario. AO was well within his powers in making the impugned addition.
The claim of the Assessee to adopt EURIBOR rate as stated before the TPO is reasonable and deserves to be accepted
Deduction on account of provision for loss arising on account of foreign exchange rate fluctuation on restatement of liability allowed by CIT(A) - Held that:- In the statement of facts before CIT(A) the Assessee has categorically claimed that the transaction in question was on current account/revenue account and not capital account. The AO has allowed part of the claim of the Assessee clearly implying that the transaction in question was on account of revenue/current account and not capital account. The order of AO is silent on this aspect. It is no doubt true that in the order of CIT(A) there is no specific finding on this aspect. In our view that by itself will not be a ground for the revenue to demand a fresh look into this aspect. We are therefore of the view that the order of the CIT(A) on this issue has to be upheld. - Decided again revenue
Deduction on account of liability on account of refurbishing warranty - Held that:- The CIT(A) in the impugned orders in appeal by the Revenue for AY 06-07 to 08-09 has not examined the terms of the agreement between the Assessee and MI and has proceeded on the basis that the Assessee was bound to reimburse the warranty claims of customers to whom MI sold Pressure cookers. For the reasons stated while deciding the appeal of the Revenue for AY 05-06, we allow the additional grounds raised by the Revenue in its appeal for AY 06-07 to 08- 09. We may also add that the liability on account of exchange rate fluctuation at the time of actual payment to MI of the alleged liability on account of warranty claims cannot also be allowed as the main claim for liability on account of warranty liability itself has been held to be not that of the Assessee.
Addition on account of disallowance of interest on the ground that the interest expenses claimed as deduction were on borrowed funds which was given as interest free advances to MI - CIT(A) deleted the addition - Held that:- the plea with regard to commercial expediency has been accepted by the CIT(A) without any basis. There has been no investigation of facts with regard to how the interest free loan was given to MI to enable it to warehouse and sell the Assessee’s products in US. As we have already seen the distributor agreement is silent on all these aspects and the basis on which CIT(A) has given relief to the Assessee in our view cannot be accepted. We however are of the view that the plea of the Assessee both with regard to its claim that interest free advance was given out of surplus funds of the Assessee as well as the plea with regard to commercial expediency in giving interest free loan to subsidiary requires fresh examination by the AO and accordingly the order of CIT(A) on this issue is set aside and the issue remanded to the AO for fresh examination - Decided in favour of revenue allowed for statistical purpose.
Disallowance of expenses claimed under the head “Royalties” paid to a non-resident in view of the provisions of Sec.40(a)(i) - non deduction of tds - Held that:- we hold that the Assessee, in the present case, cannot be said to be obliged to deduct tax at source on payments made to the non-residents as on the date when the payments were made on the basis of the decision of the Hon’ble Madras High Court in the case of COMMISSIONER OF INCOME TAX vs. AKTIENGESELLSCHAFT KUHNLE KOPP AND KAUSCH W. GERMANY BY BHEL (2002 (11) TMI 50 - MADRAS High Court ). It is only consequent to the retrospective amendment to the law which happened after the dates on which the Assessee made payments to the non-resident that the liability of the Assessee to deduct tax at source arises. Therefore no disallowance can be made u/s.40(a)(i) of the Act - Decided in favour of assessee
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2014 (4) TMI 1093
Refund of amount paid under threat and duress in the course of an investigation and interrogation undertaken - manufacturer of stainless steel castings and non-alloy steel castings - recovery of duty without demand - Held that:- In the case on hand, there was nothing except an inspection and verification. It was never the case of the respondents that they found out duty evasion in the course of investigation and that when they were ready to serve a notice under sub-section (5), the appellant made payment in terms of sub-section (6). Had this been their contention, the respondents ought to have shown the break-up of the amount of ₹ 7.53 crores into (i) duty; (2) interest; and (iii) penalty. In the absence of any of these details, the respondents cannot contend that the payment was in terms of sub-section (6). As a matter of fact, sub-section (7) is somewhat similar to sub-section (2) and it prohibits the Central Excise Officer from serving any notice in respect of the amount paid.
But, in the case on hand, a notice has been served after the learned Single Judge disposed of the writ petition, with liberty to the respondents. Therefore, it is clear that the amount of ₹ 7.53 crores paid by the appellant, will not fall either under Section 11A(1)(b) or under Section 11A(6). If it will not fall under any of these two provisions, it cannot be taken to be a payment made in relation to any statutory provision.
Therefore, irrespective of whether the amount was paid under coercion or voluntarily, the respondents have no business to retain the same. - Refund allowed with 6% interest - Decided in favor of assessee.
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2014 (4) TMI 1092
Disallowance u/s 40(a)(ia) - disallowance of commission paid of foreign agent and late payment of interest to the same agent - Held that:- When the assessee’s status of non-resident was not in dispute and that the assessee had given the copy of the agreement, details of the services rendered, correspondence for services availed alongwith supporting evidence, and moreover at that relevant time when the TDS was required to be deducted, the said CBDT circular no. 786 [F No. 500/108/98-FTD] dated 07.02.2000 [Withdrawn by Circular No. 7/2009 [F. No. 500/135/2007-FTD-I] was in operation, we hereby hold that the invocation of the provisions of section 40(a)(ia) read with section 195(2) was incorrect. The findings of the authorities below are hereby reversed and this ground of appeal of assessee is allowed. - Decided in favour of assessee
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2014 (4) TMI 1091
Computation of deduction allowable u/s.10B - Held that:- In view of the detailed reasoning given by the Ld.CIT(A) directing the AO to exclude the Freight and Insurance charges from the total turnover for computing deduction u/s.10B we find no infirmity in the same. Accordingly, the order of the CIT(A) on this issue is upheld and the grounds raised by the Revenue are dismissed.
Eligibility of depreciation - classification as ‘Furniture and Fixtures’ and ‘Plant and Machinery' - Held that:- Respectfully following the decision of the Tribunal in assessee’s own case in the preceding years and in absence of any contrary material brought to our notice we find no infirmity in the order of the CIT(A) directing the AO to allow depreciation @15%.
Disallowance of deduction u/s.10B with reference to export invoice for want of ‘extension letter' - Held that:- Since the assessee in the instant case has applied for extension of time by the prescribed authority which has neither been rejected nor declined and the RBI has taken the inward remittances on record, therefore, we hold that the CIT(A) is not justified in curtailing the deduction u/s.10B by excluding the delayed receipt of export proceeds from the export turnover. We therefore set-aside the order of the CIT(A) on this issue and direct the AO to allow the claim of the assessee u/s.10B with respect to the export invoice - Decided in favour of assessee
Refusing to treat ‘PMS’ fees paid as part of either of cost of acquisition/improvement or as ‘Cost of transfer’ for working Income from Capital Gain - Held that:- Respectfully following the decision of the Tribunal in the case of KRA Holding and Trading Pvt. Ltd. (2013 (9) TMI 1013 - ITAT PUNE ) we hold that the ‘PMS’ fees paid by the assessee is an allowable deduction from the capital gains.- Decided in favour of assessee
Entitlement for higher depreciation on SMF batteries - Held that:- Since SMF batteries are integrated with UPS and used with it, we hold that the assessee is entitled to higher rate of depreciation on SMF Batteries.- Decided in favour of assessee
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2014 (4) TMI 1090
Validity of stay order of the tribunal - tribunal asked the petitioner of make pre-deposit of 25% without considering the prima facie case - Canvat Credit - credit of duty paid on angles, channels, etc. - denial of credit since they were neither defined as capital goods under rule nor as inputs under rule of the Cenvat Credit Rules, 2004 - Held that:- In the instant case, as observed above, the learned Tribunal has recorded the submissions made on behalf of the petitioner but not given its findings thereon. Furthermore the impugned order does not disclose why the petitioner was required to deposit only 25%.
The learned Tribunal could have waived pre-deposit of disputed duty or penalty in part if it were satisfied that the deposit of the entire duty or penalty would cause financial hardship but not partial deposit or alternatively if the Tribunal were of the prima facie view that the disputed duty and/or penalty might only be partly sustainable. In the instant case the impugned order does not indicate how much of the disputed duty is prima facie sustainable, and how much is not.
The impugned order is set aside. The Tribunal shall consider the question of waiver of pre-deposit a fresh in accordance with law - Matter remanded back.
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