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Case Laws
Showing 221 to 240 of 2006 Records
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2018 (4) TMI 1790
Revocation of CHA License - imposition of penalty - import of “Defective C.R. Coils” and “Defective Hot Rolled Coils” claiming benefit of Notification Nos. 46/2011-Cus. and 69/2011-Cus - allegation that importer had not submitted AIFTA Certificate of origin in the formats as prescribed in the notifications - violation of Regulation 11(d) of the CBLR.
HELD THAT:- There is no allegation that the certificates were not issued by the authority in the exporting country or that they did not cover the goods imported. In any case, on being pointed out about the discrepancy, the importers have paid up the differential customs duty - This being the case, no fraud or connivance can be attributed to the appellants. At the most, they could be hauled up for not having advised the importers suitably even after the discrepancy was flagged to them.
However, the revocation of the licence, is surely, an over-kill; the same cannot be sustained and is therefore set aside - However, the penalty of ₹ 50,000/- imposed by the adjudicating authority need not be interfered with.
Appeal allowed in part.
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2018 (4) TMI 1789
Delay in deposit of employee’s contribution to Provident Fund and ESI u/s 2(24)(x) r.w.s. 36(1)(va) - HELD THAT:- The aforesaid issue is squarely covered against the assessee by Hon’ble jurisdictional High Court’s judgment in the case of CIT vs. Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein it is categorically held that in the case of delayed deposit of employees’ contribution to PF, the same will not be deductable in computing income under section 28 of the Act. The law so laid down by the Hon’ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending before the Hon’ble Supreme Court does not dilute binding nature of this judicial precedent.- Decided against assessee
Addition towards Prior Period Expenditure - HELD THAT:- Issue decided in favour of assessee as relying on Adani Enterprises Ltd [2016 (7) TMI 1250 - GUJARAT HIGH COURT] assessee being a company was charged uniformly for all years and would therefore, have no revenue implication of whether the expenditure was recognised in this assessment year or earlier year. The second ground was that in any case, the Revenue had recognised the prior period income. If that be so, according to the Tribunal, it would be unfair not to recognise the expenditure also of the prior period.
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2018 (4) TMI 1788
Non-imposition of penalty under Rule 13 of CCR, 2002 and Rule 15 of CCR, 2004, read with Rule 25 of CER 2002, and section 11AC of Central Excise Act, 1944 - Clandestine removal - allegation of non receipt of inputs like Ferro Manganese, Ferro Silicon Lumps, Ferro Chromes, manganese Ingot, Chrome Ingot etc. - demand based on statement of various persons - opportunity for cross-examination denied - Principles of Natural Justice - Difference of opinion - majority order.
Whether in view of the gross violation of principles of natural justice and lack of adherence to the procedure under Section 9D, the matter be remanded back to the adjudicating authority for de novo adjudication, as held by Member (Technical)?
HELD THAT:- Hon’ble High Court of Punjab & Haryana in the case of M/S AMBIKA INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND ANOTHER [2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT] has clearly ruled that if the person whose statement has already been recoded is to be examined before the adjudicating authority and if the adjudicating authority arrives at a conclusion that the statement deserves to be admitted in evidence then the question of offering the witnesses to the assessee for cross-examination arises, I would have agreed with Ld. Brother Member (Technical) had this procedure been followed by the original authority that the witnesses whose statements were recorded were examined by the adjudicating authority. However the fact is that such examination-in-chief was not conducted by the original authority and therefore, the question of cross-examination does not arise. Therefore, no purpose shall be achieved by remanding the matter back to the original authority for denovo adjudication.
I further find that the allegation against M/s.BSPL were that they did not receive inputs but availed the Cenvat Credit only on the strength of invoices without receipt of inputs. The admitted facts are that the appellants, M/s.BSPL had manufactured the goods and paid Central Excise duty on the same and there are no investigations as to from where the inputs were procured by M/s.BSPL for manufacture of goods, if they had received only the invoices and no inputs from M/s.HSAL.
The allegations of non-receipt of inputs by M/s.BSPL is not established in the proceedings - The revenue appeal in respect of M/s.AG is for non-imposition of penalty. The same also does not survive because the fact remains on the records that M/s.BSPL manufactured the goods and paid duty on the same.
The opinion of the Ld. Member (Judicial) is agreed with - the file send back to the Division Bench.
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2018 (4) TMI 1787
Valuation - inclusion of reimbursed subsidy amount admissible under the Scheme towards the payment VAT on future sale, in assessable value - HELD THAT:- The same issue has been decided by this Hon’ble Tribunal in case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [2018 (1) TMI 915 - CESTAT NEW DELHI] where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1786
Penalty u/s 271(1)(c) - defective notice - Addition u/s 68 - HELD THAT:- AO by not striking off the irrelevant default in the “Show cause‟ notice, had thus failed to clearly put the assessee to notice as regards the default for which penalty under Sec. 271(1)(c) was sought to be to be imposed on it. We thus in the backdrop of our aforesaid observations are of a strong conviction that as the A.O had clearly failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default for which it was being proceeded against, therefore, the penalty of ₹ 14,90,241/- imposed by him under Sec. 271(1)(c) clearly being in violation of the mandate of Sec. 274(1), thus cannot be sustained. We thus for the aforesaid reasons not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set aside the order of the CIT(A) upholding the same.
Even on merits failure on the part of the assessee to adduce necessary documentary evidence as was called for by the A.O to prove the creditworthiness of the donor to his satisfaction, would though in the backdrop of such unproved claim of the assessee justify addition of the same as an unexplained cash credit under Sec. 68, but however, in the absence of any material having been placed on record by the A.O on the basis of which the aforesaid claim of the assessee could be disproved, no penalty u/s 271(1)(c) could have been validly imposed in the hands of the assessee. though the assessee by failing to place on record the specific documentary evidence as was called for by the A.O to prove the credit worthiness of the donor, viz. Sh. Arun Jatia, had thus failed to prove his claim to the satisfaction of the A.O, but however, in the absence of any material having been placed on record by the A.O which could disprove the genuineness of the said claim of the assessee to the hilt, no penalty under Sec. 271(1)(c) could have been validly imposed in the hands of the assessee.
We thus after deliberating at length on the merits of the case, not being able to persuade ourselves to subscribe to the views of the lower authorities, therefore, are of the considered view that the penalty imposed by the A.O under Sec.271(1)(c), which thereafter had been upheld by the CIT(A) cannot be sustained on merits and on the said count too is liable to be vacated. - Decided in favour of assessee.
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2018 (4) TMI 1785
Contravention of the provision of Section 144C - AO instead of passing a ‘draft assessment order’ as required u/s 144C has passed final assessment order u/s 143(3) - corrigendum issued by the Assessing Officer so as to cure the defect - assessment barred by limitation - scope of rectification u/s 154 - HELD THAT:- Firstly, AO has to follow the mandatory procedure of Section 144C (1), i.e., to pass a draft assessment order and if such a draft assessment order has not been passed and instead final assessment order has been passed, then such a final assessment order is null and void;
Secondly, merely by issuing a corrigendum, final assessment order passed cannot be converted into a draft assessment order especially when such corrigendum has been passed beyond the period of limitation; and
Lastly, if the draft assessment order has not been passed in accordance with the procedure laid down in Section 144C (1) and instead final assessment order has been passed though within the limitation time, then such an order cannot be cured after the limitation has expired by any subsequent rectification proceedings or corrigendum and in such a situation all the subsequent proceedings and final assessment order will get invalidated.
It is a trite proposition that errors which can be rectified either u/s.154 or some error in the printing work for which a corrigendum has been issued, cannot be resorted for curing the defect of jurisdictional nature and if there is an error of jurisdiction or limitation, then same cannot be validated by such an order. Rectification orders can only be exercised in respect of an order which is valid on the date of proposed rectification and if the order itself was void ab initio for want of following the correct procedure of law then such a rectification cannot revive its legality.
Accordingly, we hold that the proposed corrigendum issued by the Assessing Officer so as to cure the defect of the original final assessment order is bad in law and same could not have been done and consequently entire subsequent proceedings and final assessment order dated 30.10.2013 is held to be invalid being barred by limitation and is hereby quashed - Decided in favour of assessee.
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2018 (4) TMI 1784
Refund of service tax - rejection on the ground that the premises of the respondents were not registered - Rule 5 of Cenvat Credit Rules, 2004 - HELD THAT:- The issue whether credit is eligible even though the premises is not registered was settled by the decision of the jurisdictional High Court in the case of COMMISSIONER OF SERVICE TAX-III, CHENNAI VERSUS CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CHENNAI & M/S. SCIOINSPIRE CONSULTING SERVICES (INDIA) PVT LTD, CHENNAI [2017 (4) TMI 943 - MADRAS HIGH COURT] as well as the decision in the case of m-Portal India Wireless Solutions Pvt. Ltd. Vs. CST, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT] where it was held that Registration not compulsory for refund.
Appeal dismissed - decided against Revenue.
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2018 (4) TMI 1783
Penalty u/s.271D - violation of provisions of Section 269SS - HELD THAT:- We find there is no dispute with respect to the source the ld. AR submitted that there is no tax evasion and relied on the provisions of the Act on levy of penalty. The ld. AR submitted that the assessee has filed return of income on 13.11.2015 whereas penalty order u/s. 271D of the Act was passed on 13.10.2015. We find the assessee has filed the return of income disclosing income from house property, business and profession and other sources and balance sheet was filed along with supportive financial statements.
AR’s contention that the assessee was holding the cash for the business operations at Jaipur and there is no malafide intention and the said transaction was disclosed in the income tax returns. Whereas the ld. DR submitted that the assessee has violated the provisions by accepting the cash loan. Further the ld. AR emphasized that the assessee has no intention to violate the provisions and has a reasonable cause in accepting the cash as the business transaction performed at Jaipur to be on cash to cash basis.
Considering business activity of the assessee and we find strength in the arguments of ld. AR on genuineness of transaction and circumstances of the case. Accordingly, we set aside the order of the CIT(A) and delete the addition and the grounds of appeal of the assessee are allowed.
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2018 (4) TMI 1782
Maintainability of application - initiation of CIRP application - Corporate Debtor failed to make repayment of debt - existence of debt and dispute or not - HELD THAT:- In the present case respondent had raised disputes prior to the issuance of notice under Section 8 of the Code. Invoices pertaining to cost for supply of diesel has been disputed. Confusion on such claims/ invoices has not been clarified satisfactorily with supporting evidence. Issue of approval and reconciliation of the accounts were raised and communicated in the year 2013. Claim of dispute pending long since the year 2011 prima facie suggests the need of investigation on merit. In the factual background it is reiterated that in the present case existence of prior dispute having some substance cannot be ruled out. The moment there is existence of dispute, the corporate debtor gets out of the clutches of the Code.
Section 9 (5) (ii) (d) of the Code provides that adjudicating authority shall reject the application if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility.
Petition rejected.
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2018 (4) TMI 1781
Reopening of assessment u/s 147 - activity of mushroom farming is agricultural activity or not? - whether there was any new tangible material which was discovered by the Respondent No.1 ? - HELD THAT:- In the facts of the present case when the Petitioner had categorically asserted both in the reply to the reasons as well as in the present petition that the Circular dated 14 June 1979 has no relevance, the contention of the Petitioner that this Circular was issued in context of Section 80JJA of the Act which was in operation prior to insertion of explanation 3 to Section 2(1A) and it had no relevance, has not been dealt with by the Respondent at all, except stating that it cannot be ignored. If by subsequent amendments, the Circular had lost its efficacy and that it was substituted by another circular dated 27 March 2009, the same cannot be considered as new and tangible material. Whether the Circular has lost its relevance and is substituted by a subsequent Circular has not been explained in the order rejecting the reasons, neither in the affidavit of reply. How a preexisting Circular amounts to discovery of new tangible material is also not explained.
Therefore, what is before us is only a change of opinion of the Assessing Officer, without any new material. The Petitioner had placed the material before the Assessing Officer. The Assessing Officer is supposed to apply law, including the Circulars, to the material placed before him. The Assessing Officer took a particular view and the Respondent no. 1 has merely on a change of opinion sought to reopen the proceedings. Since the criteria for exercise of the jurisdiction are not met, the action of the Respondent no.1 is without jurisdiction and will have to be set aside.
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2018 (4) TMI 1780
Validity of assessment order - Central Sales Tax Act, 1956 - grievance of the petitioner is that they are 100 per cent. exporters and that the very same assessing officer has accepted this in respect of several assessment years under the Central Sales Tax Act, 1956 and that therefore he cannot take a different stand - HELD THAT:- It appears that it is only after the petitioner attempted to revive the company that the impugned order was served. In such circumstances, we think that the delay and laches are properly explained.
On instructions, it was stated by the learned special standing counsel that the very same assessing officer has passed orders in the case of the very same assessee in relation to the previous years under the Central Sales Tax Act, 1956, confirming that he is a 100 per cent. exporter. Therefore, it was within the knowledge of the assessing officer to take note of the previous assessment orders before coming to the conclusion that he did in the impugned order, despite the failure of the petitioner to file objections - In cases where the objections are not filed to the show-cause notices and the assessees do not participate in the assessment proceedings, the assessing officer should normally look into the material available on record. Therefore, the petitioner may be given one opportunity.
The matter remanded back to the first respondent - Petition allowed.
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2018 (4) TMI 1779
Approval of Resolution Plan - outstanding debt - objection is that the Applicant has dissented the approval of the Resolution Plan, therefore, as per the communication received, disentitled for the claim - HELD THAT:- The Procedure as prescribed under The Code is that a Resolution Plan is required to be submitted by a Resolution Application u/s 30 of The Code. On approval, the Resolution Professional is to submit U/s 30(6) the Resolution Plan, as approved by the Committee of Creditors, to the AA. Thereafter, u/s 31, as reproduced supra, AA is to examine the contents of the Resolution Plan. The mandate of this section is that if the AA is "satisfied" that the Resolution Plan as approved by the Committee of Creditors meets the requirement as referred to in section 30(2), shall by an Order, approve the Resolution Plan. So the prerequisite is that recording of "satisfaction" by AA is a condition precedent. A "satisfaction" is to be recorded in writing in the Judgment approving the Resolution Plan. "Satisfaction" is required to be based upon a conscious decision on examination of the terms of the Resolution Plan.
An 'objective satisfaction' revolves around the object of enactment of the Code as enshrined in the Preamble of the I & B Code i.e. to revive the financially stressed corporate body. And the 'subjective satisfaction' depends upon logical analysis of the Financial Data supplied so as to match with the business model of the Corporate Debtor. A methodical scrutiny of Financial Statement is expected before concurring with approval of the COC.
There are no two views, and must not be, that this I & B Code provides greater accountability both on the Insolvency Professional, as also on COC, mainly comprise of lender Banks. Their approval of a Resolution Plan ought to be judged with due diligence. To sum up, in our humble interpretation the recording of an analytical 'satisfaction' is a condition precedent before granting of approval.
The Resolution Plan as approved by the Committee of Creditors is by and large hereby sanctioned by this Order subject to certain minor qualifications.
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2018 (4) TMI 1778
Approval of scheme of amalgamation - convention of meeting of the shareholders of the Transferor Company-I and the meeting of the shareholders of the Transferor Company-I was convened and scheme was approved by the majority of the shareholders - HELD THAT:- It is a fact that the notices have been issued to all the statutory authorities and except the Regional Director, the Income Tax Authorities have not submitted any objections to the Scheme. It is also a fact that the Transferee Company is going to record the cancelled portion of the capital to capital reserve and there is no repayment to the shareholders whose shares are cancelled. It is also on record that the Objector does not possess the requisite qualification to oppose the Scheme as envisaged in the provisions of section 230(4) of the Companies Act, 2013.
Taking in consideration of the shareholders whose shares are cancelled this Tribunal directed the Transferee Company to consider to make payment to the shareholders whose shares were cancelled in terms of respective clauses of the scheme and on the intervention of this Tribunal, the Transferee Company accepted to make payment to the objector at the book value as on 01.04.2016, the appointed date, however, without prejudice to the submissions made on the locus standi of the objector - The scheme does not require any modification other than mentioned at para 16 above and the said scheme of Arrangement and Amalgamation appears to be fair and reasonable, not contrary to public policy and also not violative of any provisions of law, all the statutory compliances have been made under the Companies Act, 2013.
The scheme of Arrangement and Amalgamation annexed with the petition is hereby sanctioned which shall binding on all the member, creditors and shareholders - Petition allowed.
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2018 (4) TMI 1777
Penalty levied u/s 271AAA - assessee offered undisclosed income in the return of income filed in response to notice u/s 142 - assessment proceedings were initiated u/s 153C - HELD THAT:- On mere perusal of the provisions of section 271AAA, it is clear that the provisions of section 271AAA can be invoked only in case where search has been initiated u/s 132 and undisclosed income is found as a result of such action. In the present case, return of income was filed in response to notice u/s 142.
There is no material on record suggesting that search has been initiated in the assessee’s case. It is stated that search was initiated in the case of M/s. ILC Industries during the course of which certain documents stated to be belonging to the assessee were seized. There was no notice issued u/s 153A against the assessee. From the perusal of the order of assessment for assessment year 2011-12 it is clear that the assessment proceedings were initiated u/s 153C in which case provisions of section 271AAA cannot be invoked. Therefore, the order imposing penalty us/ 271AAA cannot be sustained in the eyes of law. Appeal filed by the assessee is allowed.
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2018 (4) TMI 1776
Claim of deduction u/s 80-IA in respect of income derived from sale of carbon credits - HELD THAT:- We allow the additional grounds raised by the assessee and hold that the income from sale of carbon credits is capital in nature.
Addition of 100% of the common expenses u/s 40A(2)(b) - HELD THAT:- Assessing Officer, allowed relief to the assessee by following the order of his predecessor in the immediately preceding year wherein common expenses to the extent of ₹ 16,51,000/- had been allowed. Ld. Commissioner of Income Tax (A) also noted that the justification for increase in expenses could not be given by the assessee. Thus, it is seen that on the one hand, the assessee was not been able to substantiate the apportionment of common expenses and justify the increase in expenses and on the other hand, the lower authorities have also made the disallowance on an estimate without recording any finding of fact. Under the circumstances, it is our considered opinion that this issue should be examined afresh by the Assessing Officer.
Addition u/s 14A - HELD THAT:- As noted by CIT (A) that ₹ 26.31 cores have been invested out of self generated funds and further that all related documents, bank accounts were submitted and the trail of funds was established. Thereafter, the Ld. Commissioner of Income Tax (A) has followed the decision of his predecessor in the immediately preceding assessment year wherein it had been held that since no borrowed funds were utilized by the assessee for investment in its subsidiary concern, there was no question of incurring any expenditure on the same. Although the department has contested this action of the Ld. Commissioner of Income Tax (A), no factual or legal infirmity in this adjudication could be specifically pinpointed even during the course of proceedings before us. Therefore, on the facts of the case and in view of the factual findings recorded by the Ld. Commissioner of Income Tax (A), we find no reason to interfere with the adjudication on this issue. Accordingly, we dismiss ground no. 2 of department's appeal.
MAT - Sale of carbon credits is to be excluded while computing book profits u/s 115JB - HELD THAT:- It is settled law that the purpose and legislative intent behind introduction of provisions of section 115J/115JA/115JB was to take care of the phenomenon of prosperous zero tax companies which had continued but were paying no income tax even though they had profits and were declaring dividends. It was further sought that minimum corporate tax should be paid by these companies and accordingly MAT was introduced. However, it was never the intention of the legislature that any receipts which is not taxable per se within the tax provision or not reckoned as part of net profit as per the profit and loss account as Companies Act can be brought to tax as a book profit. Since income/profits from the sale of carbon credits is essentially in the nature of capital receipts, by no stretch of imagination can it be brought to tax under the provisions of minimum alternate tax u/s 115JB of the Act. Accordingly, we allow the grounds raised by the assessee in this regard in assessment years 2010-11 and 2011-12
Disallowance u/s 14A - HELD THAT:- As per provisions of sub- section (1) of section 14A, it is clear that for the said section to apply, the precondition is that there should be an income which does not form part of the total income under the Income Tax Act. Since the assessee company did not have any exempt income under the Act, section 14A will not get attracted. Since exempt income is nil, section 14A will not apply and once section 14A does not apply, the question of application of Rule 8D also will not arise. The Ld. Sr. DR could not point out any factual or legal infirmity in the order of the Ld. Commissioner of Income Tax (A) on this issue although he has vehemently argued against the deletion of disallowance. Therefore, on facts, we find no reason to interfere with the findings of the Ld. Commissioner of Income Tax (A) with respect to ground raised by the department in its appeal for assessment year 2010-11 and the same are dismissed.
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2018 (4) TMI 1775
Maintainability of appeal - HELD THAT:- Whether the tax imposed by rejecting the Form III-D's on technical grounds can be treated to be the tax admittedly payable by a dealer as defined in the Explanation appended to Sub-section (1) of Section 8 of the U.P. Trade Tax Act, for the purposes of computation of interest under the said sub-section?
The present revision is admitted on the question of law.
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2018 (4) TMI 1774
Issues:
1. Invocation of presumption under Section 3-AAA of the U.P. Trade Tax Act, 1948 for taxing sales to authorized dealers.
2. Taxability of rent received for machinery/equipment under 'Transfer of right to use.'
3. Consideration of Application under Section 12-B of the Act by the Tribunal.
Analysis:
1. The first issue revolves around the invocation of the presumption under Section 3-AAA of the U.P. Trade Tax Act, 1948 for taxing sales made by the revisionist to authorized dealers. The key question is whether the sales, which are taxable at the point of sale to the consumer, can also be taxed when the authorized dealers have already collected and deposited the tax on the same transactions. The revisionist argues against double taxation in this scenario.
2. Moving on to the second issue, it concerns the taxability of rent received by the revisionist for machinery/equipment under the concept of 'Transfer of right to use.' The crux of the matter lies in determining whether the effective control of the machinery was transferred to a third party, TMML, and whether TMML had the exclusive authorization to use the machinery to the exclusion of the revisionist. Additionally, the revisionist's compliance with service tax obligations on the same amount is highlighted as a relevant factor.
3. The final issue pertains to the Tribunal's refusal to consider the revisionist's Application under Section 12-B of the Act. This raises the question of whether the Tribunal, as the last fact-finding authority and the final authority to admit additional evidence under the Act, was justified in not entertaining the revisionist's application. The revisionist seeks a fair opportunity to present additional evidence, emphasizing the importance of due process in the proceedings.
In conclusion, the judgment addresses significant legal questions regarding tax implications under the U.P. Trade Tax Act, 1948, focusing on the application of statutory provisions, the interpretation of contractual arrangements, and the procedural aspects of evidence submission before the Tribunal. The parties involved await further proceedings as per the court's directions, ensuring a fair and thorough consideration of the issues at hand.
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2018 (4) TMI 1773
Maintainability of plaint - service of notice - rejection of plaint on the ground that the defendant being a company registered under the Companies Act, there is a statutory bar under Section 430 of the Companies Act, 2013, to entertain Civil Suit - HELD THAT:- This Court is of the opinion that the plaintiff has approached the forum which does not have jurisdiction over the subject matter in dispute, in view of Section 241 and 430 of the Companies Act, 2013 - Hence, the plaint is rejected.
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2018 (4) TMI 1772
TP Adjustment - Comparable selection - HELD THAT:- Assessee was engaged in rendering marketing and sale support services to Genzyme International. During F.Y. 2008-09, the assessee conducted various activities as per the arrangement with the AEs like procurement of market information, collecting, analyzing and reporting relevant market information, participation in creation of market analyses and market strategies, providing advice with respect to economic, financial, political and business environment and business practices and promote the products produced by the AE based on the instruction to be received from the AE. For rendering above services, the assessee was remunerated on cost plus 5% basis, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
RPT filter exceeding 25% - assessee submitted that the RPT is only 14.03% - HELD THAT:- We restore the issue to the file of the AO/TPO with a direction to verify the RPT filter and if the assessee fulfills the RPT filter criteria then to retain this company as comparable. The first issue raised by the assessee is accordingly allowed.
Incorrect enhancement of cost base for computing the arm’s length price - HELD THAT:- An amount of ₹ 3.90 crores was considered by the assessee for computing transfer prices in financial year 2007-08 itself for computing the tax depreciation and tax computation. The marketing fee paid was amortized only at the rate of 25% on WDV starting financial year 2007-08. It is also the submission of the ld. AR that in subsequent assessment years, the TPO has not added the tax depreciation to the cost base of the assessee company. The matter requires a re-look at the level of the DRP considering the past assessment year as well as subsequent assessment year of the assessee company on this issue. We, therefore, restore this issue to the file of the DRP with a direction to adjudicate the issue afresh after giving due opportunity of being heard to the assessee. Needless to say, the DRP shall decide the issue as per fact and law. The second issue raised by the assessee in the grounds of appeal is allowed for statistical purposes.
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2018 (4) TMI 1771
Assessment u/s 153A - Validity of making addition based on the seized paper if it constitutes an incriminating material or otherwise - HELD THAT:- Regarding the Gevrai lands in question, we find in the earlier assessment years, relevant transactions on this land acquisition and sale are found duly accounted in the books of account/financial statements. This finding of ours is confirmed by the entries in the balance sheet
Regarding sale transaction, it is also evident that the amounts received by the assessee in response to proposed sale were also equally accounted in the books of account where name of Mr. Ajay Shivajirao Jadhav is found has received the amount of ₹ 2.90 crores against sale of Aurangabad Land (Gevrai Land) Mr. Amit Shivajirao Jadhav also received the equal amount. It is also an undisputed fact that other payments received by the assessee are found accounted in the books of account. It is also not the case of the Revenue that the assessee received on-money payments and there is evidence to support the same.
It is an undisputed fact that, in principle, the said agreement to sale seized by the Department during the course of search & seizure action is an accounted transaction and therefore it is not an incriminating document for the AO to rely on for making additions of any kind in the search assessment, like the present one. In our view, it is settled legal proposition of law that the additions if any have to be allowed to be made in the non-abated assessment only based on incriminating material.
Addition on account of income from let out properties - HELD THAT:- It is settled legal proposition that so long as Municipal values are available the same becomes bindings and therefore, the decision of the AO in calculating the rental value based on any other method is unsustainable in law. Therefore, the above conclusion drawn by the CIT(A) on this issue is fair and reasonable and it does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed.
Addition on account of adhoc declaration made during search proceedings carried out u/s.132 - HELD THAT:- We find the AO has merely relied on the statement given by the assessee and he did not go into the issues that requires disclosure of additional income of ₹ 54 lakhs. On these facts, we find the issue requires remanding to the file of AO for verification of the seized material. We find the Pune Bench of the Tribunal in the case of Poonawalla Investments and Industries Pvt. Ltd. [2018 (4) TMI 1770 - ITAT PUNE] it is evident that the onus is on the AO to establish the omissions and commissions if any before taxing the buffer disclosure of ₹ 54 lakhs by the AO. As such, AO did not examine this aspect of the issue. Therefore, with similar directions to the AO, we remand the issue to the file of AO (supra). Accordingly, this issue is adjudicated pro tanto. The grounds raised by the assessee are allowed for statistical purposes.
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9911796707
