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Showing 221 to 240 of 1706 Records
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2016 (7) TMI 1491
Valuation of closing stock of gold - LIFO or FIFO method - stock discrepancies were found in survey and the Government approved departmental valuer was also present at the time of survey for valuation of stocks found in the survey - Held that:- Once the basic premise on the non-existence of 24 ct gold is defeated, the purity difference also vanishes and there is no need to convert the 24 ct gold into 22 ct gold as done by the ld CITA for sustenance of addition of ₹ 14,62,733/-. Hence we hold that there is only a minor difference of 131 grams on an overall basis on the date of survey and quantity wise reconciliation is also duly filed before the lower authorities which are reproduced in page 2 of the AO’s order. Absolutely no basis for sustenance of addition in the sums of ₹ 1,54,73,471/- and ₹ 36,87,474/- towards difference in stocks on the date of survey in the facts and circumstances of the case.
Addition towards difference in valuation of stock - we find that the AO though has accepted the quantity analysis of items of ornaments consisting of 24 ct, 22 ct & 18 ct as per audited accounts, but he has multiplied the quantity with the average cost of purchase price as on 31.3.2009. This was in total disregard of the valuation which was adopted by the assessee at cost consistently and there being no deviation throughout the past many years which is fully and elaborately detailed in the audited accounts enclosed in the paper book and duly accepted as such by the revenue from year to year without disturbing the same at any stage
AO had not recorded any clear finding in his order that the LIFO method of accounting followed by the assessee for valuing its closing stock was such that correct profit could not be deduced from the books of account maintained by the assessee. In these circumstances, it would not be justified in rejecting the closing stock valuation regularly adopted by the assessee.
In the instant case, the assessee had furnished the closing stock valuation workings as on 31.3.2005, 31.3.2006, 31.3.2007, 31.3.2008 and 31.3.2009 before us which are forming part of the paper book vide pages 20 -182 . On going through the said workings, we are fully convinced with the method of accounting regularly employed by the assessee for valuation of closing stock of Gold and other jewellery using LIFO method.
It is quite natural that jewellery being a fashion industry, the old stocks would most of the times remain with the assessee and the revenue cannot expect the old stocks to be sold out first though it would remain in the wish list of the jeweller. We find that the aforesaid valuation exactly fits into the accepted method of valuation for a jeweller. We hold that no addition could be made towards value of stock because the closing stock cannot be construed as a source of profit for the assessee.
We find that the assessee has been consistently following LIFO method of accounting for valuation of its closing stock of gold which has been accepted by the department in the earlier years even in scrutiny assessment proceedings of the assessee. Then there is no justifiable reason to reject the same method during the year under appeal. - Decided in favour of assessee
Addition for difference of 230.571 grams - Held that:- We find that this addition of ₹ 3,53,004/- was made by the ld AO due to identifying difference of 230.571 grams between the stock as per gold ledger and stock as per item wise register. The assessee had not filed any reconciliation statement for the same before the lower authorities and even before us. In these circumstances, we find no reason to interfere with the order of the ld CITA in this regard. - Decided against assessee
Addition based on the impounded document DKB (R ) -15 found during the survey representing receipt of gold of 410.36 grams - Held that:- We find that the assessee did not adduce any evidence apart from stating that the same represent gold received from karigar but had not corroborated the same with reference to the regular books maintained by the assessee. Hence we hold that the CITA had rightly confirmed this addition - Decided against assessee
Addition on impounded purchase voucher no. 2239 [DKB (R ) -4] found during the survey representing purchase of gold of 98 grams from Shri Anil Kr Gupta - Held that:- We find that the assesee had primarily proved that the visit of Shri Anil Kr Gupta on 7.7.2008 to the showroom had been duly corroborated with reference to the regular books maintained by the assessee. But the assessee should have obtained confirmation from Shri Anil Kr Gupta confirming the stand of the assessee that he did not sell any gold weighing 98 grams to the assessee on 6.7.2008 to prove the case beyond doubt. Hence we find that the assessee had not discharged its primary onus on this aspect. Hence in these circumstances, we hold that the ld CITA had rightly confirmed this addition - Decided against assessee
Addition on the basis of entry in the purchase voucher - Held that:- We find that this addition of ₹ 94,837/- was made by the ld AO based on the impounded purchase voucher no. 2666 dated 19.11.2008 found during the survey representing purchase of gold of 74.94 grams. AO had observed that the assessee had not denied the basic fact that the said purchase voucher is not part of the regular books maintained by the assessee. Hence in these circumstances, we hold that the CITA had rightly confirmed this addition - Decided against assessee
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2016 (7) TMI 1490
Disallowance of business expenses - whether essential feature that the expenses should not only be incidental or necessary, but it should be “wholly and exclusively” for the purpose of business, has not been satisfactory brought out by the assessee - temporary stoppage of busniss activities - Held that:- What is relevant is that all necessary licenses etc. required to keep the hotel business alive are being maintained by the assessee. AO himself was convinced that “the government dues” being the minimum statutory expenses were allowable and as a result thereof he has allowed “duties and taxes”, “insurance of assets”, “license fees” and “MVAT expenses”.
Considering the nature of expenses which have been allowed by the AO, we find no good reason why “water expenses” and “electricity expenses” can be disallowed. We also find no good reason why security charges paid to secure the assets of the assessee can be disallowed as maintenance of physical assets and securing the property from vandals, trespassers etc. is the bare minimum expenditure necessarily required to be incurred. Similarly, salary of one Accountant and one office boy can hardly be said to be an expenditure which was not incurred wholly and exclusively for the business of the assessee.
A temporary lull at a point of time in the business of the assessee in the absence of any fact or evidence to the contrary cannot lead to the conclusion in the peculiar facts and circumstances of the case that the business has permanently closed especially in view of the fact that as per the assertions of the assessee before the Assessing Officer that its licenses etc are being maintained and kept intact ensuring that the hotel is ready for operation. A fact which has not been disputed as license fees have been allowed by the AO himself. - Decided in favour of assessee.
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2016 (7) TMI 1489
Comparison of assessee's activities - whether Tribunal was justified in law holding that the assessee's activity of providing services is similar to the nature of services and activity of Carlyle India Advisors Pvt. Ltd. ? Held that:- We note that the impugned order of the Tribunal allowed the Respondent-Assessee's appeal by following its order in the case of same Respondent-Assessee for the Assessment Year 2006-2007. It is an agreed position between the parties that being aggrieved by the order of the Tribunal for the Assessment Year 2006-2007 rendered in respect of the same Assessee, the Revenue had preferred an appeal to this Court[2016 (3) TMI 736 - BOMBAY HIGH COURT]. This court by an order dated 8th March, 2016 dismissed the Revenue's appeal.
Revenue is unable to show any distinguishing features in the present facts which would warrant taking a view different from that taken in the order above - No substantial question of law
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2016 (7) TMI 1488
TP adjustment - comparable selection - as argued benefit of underutilisation of capacity should be allowed before making any adjustment - Held that:- Without considering all the relevant and material facts due taxes cannot be assessed. In the case before us, the basic fact of capacity-underutilisation has been ignored. Besides, depreciation would also have bearing on taxable income. Even in cases of domestic companies it plays a vital role. In the initial years most of the manufacturing companies suffer losses because of high depreciation. In short, for determining fair TP adjustments, the TPO/FAA should have considered these vital factors and given finding.
Along with the depreciation certain fixed operating costs, like Factory Rent,Testing Research & Development Cost etc.would have to be incurred irrespective of the level of production. Respectfully following the cases relied upon by the AR we hold that appropriate adjustment has to be allowed while computing the net margins in the case of tested party also to facilitate comparability analysis - in the interest of justice, matter should be restored back to the file of the AO/TPO for fresh adjudication who would consider the capacity under-utilisation factor along with the other factors for determining TP adjustments.
Difference in closing stock of gold - AO observed that gold had been valued at 532.80 per gram, that the value shown by the assessee of gold was abnormally below the market value of ₹ 1,213/- per gram as on 31.03.2008 - difference between value of closing stock shown by the assessee and value of closing stock computed by AO - assessee had argued that there was a typographical mistake in the audit report, that a revised report was submitted that indicated the mistake committed while filing the original return - Held that:- AO should have made further inquiries and should have examined who had issued two audit reports to find out the truth of the claim of the assessee that there was mistake in the first audit report. Audit reports are not simple piece of papers-they are prepared and signed by the professionals. Therefore, the AO should have verified the facts before making an addition. We are restoring the issue to the file of the AO, as we are of the opinion that matter needs verification about the claim made by the assessee - matter needs verification about the claim made by the assessee - Decided in favour of assessee partly
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2016 (7) TMI 1487
Penalty - purchase and import of electrical generator under the cover of a Form-C - applicability of provisions of Section 10(b) of the 1956 Act - Held that:- It was possible that the assessee did not deliberately issue Form C for import of the generator and that the same could possibly be attributed to a mistaken opinion formed by it. It however recorded that since Form C could not have been issued for the purposes of import of the generator, it was apparent that an attempt had been made to evade payment of tax. This view taken by the first appellate authority was affirmed by the Tribunal.
Once the first appellate authority came to a conclusion that it was possible to take the view that Form C was erroneously issued and that the same could be characterized as a mistake, the charge of a "false representation" could not have been sustained. In the absence of the authorities having formed the opinion that the assessee had falsely represented the import to be one covered by his certificate of registration, the imposition of penalty is clearly rendered unsustainable - This Court even otherwise finds no material circumstance which would justify a conclusion that the assessee had made a false representation while importing the article in question.
Revision allowed - decided in favor of assessee.
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2016 (7) TMI 1486
Disallowance of expenses debited as cost of ESOP in profit and loss account - Held that:- In the present case, the ITAT has by the impugned order restored the matter to the file of the AO for re-adjudication. The impugned order of the ITAT is consistent with what has been held by this Court in Commissioner of Income Tax v. Lemon Tree Hotels [2015 (11) TMI 404 - DELHI HIGH COURT]. Consequently, no substantial question of law arises as far as this issue is concerned.
Nature of expenses - software expenses - revenue or capital - ITAT accepted it as revenue expenditure - Held that:- The ITAT has in the impugned order placed reliance on the decision of this Court in CIT v. Asahi India Safety Glass Ltd.[2011 (11) TMI 2 - DELHI HIGH COURT]. The Revenue has made a reference to the Special Leave Petition (SLP) filed by the Revenue against the said order [2012 (7) TMI 1075 - SUPREME COURT]. Learned counsel for the Assessee has handed over a copy of the order dismissing the Revenue's SLP filed against the aforementioned judgment. - decided in favour of assessee.
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2016 (7) TMI 1485
Deduction u/s.80P(2)(a)(i) - interest income received from non cooperative banks - whether interest income is not attributable to the business of the assessee that of providing credit facilities to its members - as per AO such income fall under the head “income from other sources” u/s.56 and not u/s.28 - Held that:- As relying on decision in the case of Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit (2016 (7) TMI 1484 - ITAT PUNE) hold that the assessee is entitled to deduction u/s.80P(2)(a)(i) on the interest income kept with banks other than cooperative banks/cooperative societies. Therefore, the order of the CIT(A) is set aside and the grounds raised by the assessee are allowed.
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2016 (7) TMI 1484
Deduction u/s.80P(2)(a) eligibility - disallowance of interest income - Held that:- Society which is carrying on the business of banking activity and providing credit facility to its members is eligible for deduction u/s.80P(2)(a)(i).
In view of the decision of the Tribunal in assessee’s own case as well as the decision of the Coordinate Bench of the Tribunal in the case of Shri Laxmi Narayan Nagari Sahakari Patsanstha Maryadit cited (2015 (8) TMI 1085 - ITAT PUNE), find no infirmity in the order of the CIT(A) holding that assessee is entitled to deduction u/s.80P(2)(a)(i) on the interest income. - decided in favour of assessee
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2016 (7) TMI 1483
TDS u/s 194C - indeterminate value of bye products retained free of cost by the rice millers in accordance with policy framework and guidelines of the Central Government agency - consideration in kind - Held that:- As decided in ITO VERSUS AHAAR CONSUMER PRODUCTS (P) LTD. [2011 (2) TMI 488 - ITAT, DELHI] occurrence of just exchange of goods for goods and does not involve any cash outflow. Although services were taken, it is difficult to say that the residuals and the losses left by the assessee in favour of AIL are purely consideration for the job that is done. The market fluctuations in the price structure of the raw material and the end product cannot be just ignored in the whole transaction nor the process loss. The process loss could be either more or less than the percentage agreed to between the parties - the residual that is left by the assessee, apart from covering the labour cost of processing, also includes the protection from market fluctuations as also protection from adverse process loss. - Decided in favor of assessee.
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2016 (7) TMI 1482
TDS u/s 194C - indeterminate value of bye products retained free of cost by the rice millers in accordance with policy framework and guidelines of the Central Government agency - consideration in kind - Held that:- As decided in ITO VERSUS AHAAR CONSUMER PRODUCTS (P) LTD. [2011 (2) TMI 488 - ITAT, DELHI] occurrence of just exchange of goods for goods and does not involve any cash outflow. Although services were taken, it is difficult to say that the residuals and the losses left by the assessee in favour of AIL are purely consideration for the job that is done.
The market fluctuations in the price structure of the raw material and the end product cannot be just ignored in the whole transaction nor the process loss. The process loss could be either more or less than the percentage agreed to between the parties - the residual that is left by the assessee, apart from covering the labour cost of processing, also includes the protection from market fluctuations as also protection from adverse process loss. - Decided in favor of assessee.
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2016 (7) TMI 1481
TPA - comparable selection - functional dissimilarity - Held that:- The assessee is engaged in providing software services to Barclays Group worldwide. The assessee company has been set up as an offshore technology centre in India. The software services provided by the assessee include development, maintenance and enhancement of software for new technologies and platforms and up-gradation, modification of existing software applications and systems. The software services rendered by assessee are to support internal software related requirements for the Barclays Group and not for sale to third party, thus companies functional dissimilarity with that of assessee need to be deselected from final list.
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2016 (7) TMI 1480
Reopening of assessment - non disposal of objections - Held that:- In this case, it is not in dispute that the objections filed by the assessee were not disposed off by the Assessing Officer. Therefore, consequential assessment framed by the Assessing Officer cannot stand in the eye of law.
Judgment of Gujarat High Court in General Motors India Pvt. Ltd. [2012 (8) TMI 714 - GUJARAT HIGH COURT] and the judgment of Apex Court in GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] has found that the Assessing Officer was first required to dispose off the objection of the assessee. Since the objections were not disposed of, the impugned assessment dated 31.12.2010 was void ab initio. - Decided in favour of assessee.
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2016 (7) TMI 1479
TDS u/s 194C - addition u/ 40(a)(ia) - recipient have already included the Generator Expenses on which the appellant failed to deduct the tax u/s 194C in its Income Tax return filed under section 139 - Held that:- Addition is wholly unjustified. Where a person fails to deduct tax at source on the sum paid to a resident or on the sum credited to the account of a resident, such person shall not be deemed to be an assessee in default in respect of such tax if such resident has furnished his return of income under section 139 . What is common to both provisos to sections 40(a)(ia) and 201(1) of the Act is that as long as the payee or resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default.
The issue is covered in favour of the assessee by the judgement of the Hon'ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township P. Ltd [2015 (9) TMI 79 - DELHI HIGH COURT] which is of later dated 26..8.2015. It is well settled law that when two views are possible, the decision in favour of the assessee may be followed. Other conditions are not disputed. We delete the entire addition. - decided in favour of assessee.
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2016 (7) TMI 1478
Valuation - Job-work - fabricating and mounting the bodies of buses and trucks on the chassis - Held that:- On merits the issue of liability to duty stands settled against the appellant in the case of AUDI AUTOMOBILES VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2009 (5) TMI 426 - CESTAT, NEW DELHI]. Therefore, the duty and interest are recoverable. However, the Tribunal has clearly stated that in view of the facts and circumstances in those cases which are similar to the facts and circumstances in the present cases) no penalty was warranted.
Valuation - inclusion of entry tax and VAT in assessable value - Held that:- There are no force in the appellants submission that their contention regarding non-includability of taxes in the assessable value for determining the quantum of duty has not been adverted to by the primary adjudicating authority though the contention was raised before him.
Matter remanded with the direction that demand should be recomputed, if necessary, after considering the contention of the appellant regarding non-includability of taxes in the assessable value - No penalty is warranted in these cases - appeal allowed by way of remand.
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2016 (7) TMI 1477
Striking of name of company challenged - Held that:- Either to claim the assets of company or answer the claims of third parties against the company, the restoration of company in the register of companies is otherwise just. Therefore, this court holds that the petitioner, though was not aggrieved on the day when the application was made, but with the acquisition of subsequent knowledge or information about the assets of the company, the petitioner being the ex-chairman/shareholder of the company is a person aggrieved against the striking off the name of company from the register and can apply for cancelling the striking off and restoring the name in the register. Hence, a case is made out that otherwise it is just and proper to restore the name of the company in register.
The company petition is ordered, striking off name of the company is cancelled and the Registrar is directed to restore the name of M/s. Sree Raja Rajeswari Paper Mills Ltd. in the register maintained by the Registrar of Companies. The petitioner is directed to take such other or further steps as are required under the Act to formalise the restoration of company.
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2016 (7) TMI 1476
Gain on sale of shares - LTCG OR busniss income - genuineness of claim - Held that:- Transactions of the assessee can by no stretch of imagination be considered as investment transactions. They are only make believe transaction. Hence no infirmity in the revenue taxing the receipt in this regard.
The entire amount of the so called receipt of share sales could well also be treated as unexplained credit u/s 68 as it has all the ingredients of attracting the rigours of the said section. Section 68 of the I.T. Act provides that where any sum is found credited in the books of the assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the AO satisfactory, the sum so credited may be charged to income-tax as income of the assessee of that year.
In the present case the assessee’s explanation that the said receipt is on account of investment in shares whereby share of ₹ 5/- of unknown company has jumped to ₹ 485/- in no time has been totally rejected by the authorities below. The assessee has not at all been able to adduce cogent evidences in this regard. There is no economic or financial justification for the sale price of these shares. The so called purchaser of these shares has not been identified despite efforts of the AO. The broker company through which shares were sold did not respond to queries in this regard. Hence the fantastic sale price realisation is not at all humanly probably, as there is no economic or financial basis, that a share of little known company would jump from ₹ 5/- to 485/- - Decided against assessee.
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2016 (7) TMI 1475
Additions of expenditure towards enrolment under RSBY scheme - allowable revenue expenditure u/s 37 - Held that:- As decided in assessee's own case [2014 (7) TMI 1280 - ITAT PUNE] DR could not controvert the finding given by the CIT(A) that the amount received during the year has been shown as income and the assessee has claimed the corresponding expenditure incurred on the printing and issue of smart cards. Under these circumstances and in view of the detailed reasoning given by the CIT(A) we find no infirmity in her order. The Ld. Departmental Representative also could not point out any other mistake in the order of the CIT(A). Merely because the amount appears to be huge cannot be a ground to disallow the same on the ground of enduring benefit to the assessee when the corresponding revenue earned has been considered as income of the impugned year. - Decided in favour of assessee
Addition of Provision for Consultancy Charges - addition on the ground that the assessee has not been able to furnish any cogent evidence in support of the provision claimed - Held that:- The assessee has filed the detailed list of consultants and the payments made to them during the period relevant to the assessment year 2010-11. The assessee has also filed sample copy of appointment letter to the consultant as additional evidence. Assessee has prayed that the assessee can demonstrate from the documents available with him the genuineness of provision for consultancy charges. We are of the considered view that this issue needs a revisit to the file of Assessing Officer. Accordingly, we remit this issue back to the file of Assessing Officer for reconsideration in the light of documents furnished by the assessee to substantiate its claim.
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2016 (7) TMI 1474
Non maintenance of books of accounts - estimation of profit in respect of sub contract works and contract works - CIT(A) has restricted the disallowance in respect of sub contract works at 7% to 5% and in respect of main contracts 12.5% to 9%. - Assessee is a civil contractor and also carried sub contracts - Held that:- Both the A.O. as well as CIT(A) stated that the assessee is not able to file full details and proper books of accounts. We find that estimation has to be based on facts and circumstances of the each case. In the present case, the estimation restricted by the Ld. CIT(A) as against the order of the A.O., we find it just and reasonable, there is no reason to interfere with the order passed by the CIT(A). Thus this appeal filed by the revenue is dismissed.
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2016 (7) TMI 1473
Computation of the taxable income under Section 44BB - Addition of service tax collected on behalf of the Government while computing income u/s.44BB(1) - contention of AR was that service tax is not includible in the gross receipts while computing profit u/s.44B - Held that:- The issue under consideration is squarely covered by the decision of Hon’ble Delhi High Court in the case of Mitchell Drilling International (P) Ltd. [2015 (10) TMI 259 - DELHI HIGH COURT] wherein the Court held that for the purpose of presumptive income of assessee under section 44BB, service tax collected by assessee was not be included in the gross receipts in terms of Section 44BB(2) r.w.s.44BB(1). - Decided in favour of assessee
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2016 (7) TMI 1472
Doctrine of forum conveniens - Revocation of leave granted - Held that:- The Law is quite settled that the parties by consent cannot confer jurisdiction upon a Court. It is not a case where two Courts have jurisdiction of which the parties have elected one. If we see the order passed at the time of granting leave, then there will not be any confusion. The plaintiff has proceeded on the footing that Sholinganallur comes within the territorial jurisdiction of this Court. That is why, the averments that the agreement was entered into, the office of the plaintiff is situated within Chennai, the first defendant worked in Chennai and followed by the acceptance of resignation have been taken note of by this Court. Therefore, there is no other way that is available for the plaintiff except to approach the Court, which has got territorial jurisdiction over Sholinganallur.
The submission of the learned Senior Counsel for the Plaintiff that the payments having been made from the bank at Chennai, the suit is maintainable, cannot be countenanced. Admittedly, the second defendant is not situated within the territorial jurisdiction of this Court. The payment is a mere ministerial or administrative act. It is not a material fact, which requires to be proved leading to the granting of relief in favour of the plaintiff. It is not even a relevant fact. Hence, the submission made in this regard is accordingly rejected.
Application disposed off.
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