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Showing 241 to 260 of 1429 Records
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2014 (12) TMI 1196
Profits and gains on purchase and sale of shares - assessed under the head ‘capital gains’ or ‘profits and gains of business’ - Held that:- we have to necessarily hold that the gains derived from the purchase and sale of shares by the assessee is rightly offered to tax under the head capital gains and not business income. The facts show that out of the total short term capital gain of ₹ 1,75,51,496/- the undisputed fact is that an amount of ₹ 1,39,41,555/- was earned on shares which were held by the assessee for more than 30 days. In fact short term capital gain of ₹ 83,56,196/- was earned on shares which were held for more than 4 months. Similarly the assessee earned capital gains of more than ₹ 40 lakhs for shares which were held for more than 5 months.
This is not a characteristic of a trader. There are no borrowed funds. The assessee has always classified the purchases as investments in its books of accounts. In the earlier year the assessee has disclosed capital gains and the AO in the order passed u/s 143(3) accepted the same. On this factual matrix we agree with the contentions of the Ld.Counsel for the assessee that the gains in question cannot be assessed under the head income from business.’ We hold that the entire profits from the purchase and sale of shares have to be assessed under the head ‘capital gains’. - Decided in favour of assessee
Disallowance u/s 14A - Held that:- t the entire or whole expenditure has been disallowed as if there was no expenditure incurred by the respondent assessee for conducting business. The CIT(A) has positively held that the business was set up and had commenced. The said finding is accepted. The respondent-assessee, therefore, had to incur expenditure for the business in the form of investment in shares of cement companies and to further expand and consolidate their business. Expenditure had to be also incurred to protect the investment made. The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the AO and has also not been doubted by the CIT(A). Thus we set aside this issue to the file of AO for fresh adjudication in accordance with law as the facts are not clearly coming out in the assessment order as to whether the assessee has earned tax free income during the year - Decided in favour of assessee for statistical purposes.
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2014 (12) TMI 1195
Transfer pricing adjustment - selection of comparabels - Held that:- Infosys is not a suitable comparable to the case of the present assessee i.e. Pyramid India because there is a vast difference between functional profile of Infosys and the assessee company. We also note that the assessee is only providing contract software development services and IT staffing services and, on the other hand, Infosys being a high turnover giant company having a different functional profile, along with huge expenses on advertising and marketing and having substantial intangible assets, cannot be held to be a suitable comparable for the assessee company which is only having turnover of ₹ 7.24 crore from the contract software development services segment.
KALS Information Systems is not a suitable comparable as this company was developing software products and was not merely, purely or mainly a software provider company.
Avani Cincom Technologies earns revenue from sale of software products and software services and in absence of segmental details and data, AvaniCincom Technologies cannot be considered as comparable to the assessee company who was providing contract software development services only.
Persistent Systems Ltd. in absence of segmental details/information about segregated income from both the segments, the company cannot be taken into account for comparability analysis and, therefore, Persistent Systems Ltd. ought to have been omitted from the final set of comparable.
Quintegra Solutions Ltd. ought to have been omitted from the final set of comparables for the year under consideration as undisputedly, present assessee company is primarily engaged in provision of contract software development services (CSD segment) and IT staffing services
Tata Elxsi (Seg) not fit for comparability analysis for determining the ALP of the assessee having turnover of more than ₹ 200 crore and more than 50 times of the assessee’s turnover, also owns several intellectual property rights and intangible assets worth 11.86 crores which are 12% of its total net fixed assets.
Lucid Software is not a suitable comparable for the purpose of determination of ALP of the impugned transaction of the present assessee and this entity deserves to be deleted from the final set of comparables as Lucid Software has developed a software product named “Muulam” and for this purpose, the company has employed heavy capital in development of a specific product, then profitability in the sale of product would be certainly high in comparison to the company which is only involved in the service sector.
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2014 (12) TMI 1194
Assessment u/s 153A - penalty levied u/s. 271(1)(c) - CIT(A) deleted the addition - Held that:- if the name of the assessee against whom the block assessment has been made, does not figure in the warrant of authorization issued u/s.132, the block assessment would be unauthorized, void ab-initio. If the block assessment itself is without jurisdiction, then there is no question of levy of any penalty u/s.158BFA(2). Accordingly, the Tribunal had held that penalty cannot be sustained once the block assessment is held to be void ab-initio. Since in the instant case the assessee has taken a specific ground before the Ld.CIT(A) that as there was no warrant of authorization in the name of the assessee, the 153A proceedings are bad in law and since the Ld.CIT(A) has not adjudicated on this issue, therefore, we deem it proper to restore the issue to the file of the Ld.CIT(A) with a direction to adjudicate the ground of appeal raised. He shall also give a finding as to whether any warrant of authorization was issued in the name of the assessee or not.
Since we are restoring the matter to the file of the Ld.CIT(A) on this preliminary issue, we refrain ourselves from adjudicating the appeal on merit.- Decided in favour of Revenue for statistical purposes.
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2014 (12) TMI 1193
Non granting of interest u/s 244A on the self assessment tax paid - maintainability of proceedings u/s 154 - Held that:- The issue of interest on self assessment cannot be raised in proceedings u/s 154, cannot be accepted, because it was only after giving effect to the Ld.CIT(A) order and while granting refund, the AO has not granted the interest on self assessment tax. The only course left before the assessee was to file a petition u/s 154. Thus the claim of interest of self assessment tax is maintainable in the proceedings u/s 154. So far as the issue, whether interest should be granted on the amount of self assessment tax paid is now covered by the decision of the Hon'ble Bombay High Court in the case of Stock Holdings Corporation of India (2014 (11) TMI 899 - BOMBAY HIGH COURT ), wherein held that tax paid on self assessment would fall within the ambit of section 244A(i)(b). Accordingly the AO is directed to grant interest u/s 244A on the self assessment tax. - Decided in favour of assessee
Working of interest u/s 244A while granting refund to the assessee - Held that:- The assessing officer should examine the working of refund and interest afresh, keeping in view the ratio laid down by the Hon'ble Delhi High Court in the case of India Trade Promotion Organization Vs. CIT (2013 (9) TMI 451 - DELHI HIGH COURT). The assessee can submit its own working, which can be examined by the AO in light of the decision of the Hon'ble Delhi High Court as their Lordships after examining the relevant provision of section 244A and effect of the decision of Hon'ble Supreme Court in the case of CIT Vs. HEG [2009 (12) TMI 35 - SUPREME COURT] have laid down the principle as to how the part payment of refund and the interest on the balance amount is to be calculated - Decided in favour of assessee partly for statistical purpose.
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2014 (12) TMI 1192
Long term capital asset - CIT(A) held that the assessee has been holding the 2000 shares of his employer company M/s I Flex Solutions Ltd as “Legal Owner” for more than one year and hence, it was long term capital asset” - Held that:- found from the record that the assessee has got these shares under a scheme of ESOP wherein the assessee received 250 shares in April 2000 (before the issue of the bonus in October 2000 and September 2003 and split of the shares in two of ₹ 5/- each). However, no basis has been given by the AO for holding that the shares were purchased on 18.12.2006. However, ld. CIT(A) has recorded, finding to the effect that the shares were allotted to the assessee under ESOP scheme in the year 2000 and thereafter bonus shares were issued and there was a split of shares which resulted in total number of shares at 2000, accordingly treated the same as long term capital assets. At no point of time, the ld. DR controverted the finding of CIT(A), by bringing any positive material on record. Accordingly, we do not find any infirmity in the order of ld. CIT(A) for allowing the assessee’s claim of Long Term Capital Gains. See Muthuswamy Ravikumar V/s ACIT [2008 (3) TMI 407 - ITAT BANGALORE-A] wherein held it is the date of grant of the stock option in favour of the assessee that is material for determining the period of holding the asset in question, and not the date on which the option was exercised and stock options were converted into shares. capital gains arising out of the sale of shares acquired through ESOPs have to be assessed as long-term capital gains with consequential benefits of indexation and exemption under s. 54 - Decided in favour of assessee.
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2014 (12) TMI 1191
Disallowance of interest as interest free advances were given to its sister concerns - ITAT deleted the addition - Held that:- , the assessee admittedly had its own funds, as referred to earlier, and admittedly such funds/reserves being substantially higher than, even otherwise, the advances to the debtors, no notional interest or hypothetical interest could have been disallowed on such facts. The revenue has failed to prove nexus. In our view, the ITAT has correctly appreciated the facts and law in deleting the notional interest, disallowed by the AO and accordingly the appeal is decided against the revenue and in favour of the assessee.
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2014 (12) TMI 1190
Waiver of pre-deposit - Proceedings under FEMA - Difference of opinion between the members of the tribunal - Scope of the reference made in case of difference of opinion of two Hon’ble members under Section 31 of FEMA, 1999 - Held that:- It is not open for the Chairperson/third member to re-write the judgment/order, according to his understanding. He can not disagree with the findings of both the Hon’ble Members but has to agree with one of the findings which appear to him to may be more logical and correct.
At the stage of passing interim order there is no scope of expressing final opinion in the matter. By expressing final opinion, the views once taken at the preliminary or early stage can not be changed at the time of final adjudication on merits conveniently. Therefore, the :observations made in Paragraphs 35 and 36 of the judgment by Dr. S.D.Singh, Hon’ble Member, through which conclusive opinion touching the merits appears to have been expressed is against the propriety and settled legal position of law on this point.
I am in agreement with the views expressed in the order of Hon’ble Member Dr. H.K. Mudgil in his order dated 4-8-2014 with regard to Paragraphs 35 to 37 of the order of the Hon’ble Member Dr. S.D. Singh. In the light of my agreement the same shall be treated to be the majority opinion of the Tribunal including those who first heard it. - imposition of condition of depositing 40% and furnishing bank guarantee for 60% will adequately safeguard the interest of the revenue.
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2014 (12) TMI 1189
Validity of revision orders u/s 263 - Held that:- Clearly, ld. CIT has not mentioned anything about the assessment order made by the Assessing Officer to be erroneous or prejudicial to the interest of Revenue. Further, even the submissions of the assessee have not been rejected nor rebutted. In these ci rcumstances, we are of the view that the order passed under section 263 is unsustainable and consequently quash the same. - Decided in favour of assessee.
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2014 (12) TMI 1188
Initiation of proceedings under Section 153-C - ITAT setting aside the initiation on the ground that no written satisfaction note was recorded by the Assessing Officer of the persons searched - Held that:- We note that the present case relates to the period prior to the amendment made to Section 153-C by Finance (No.2) Act, 2014 with effect from 1st October, 2014.
Filing of printed paper book is dispensed with. However, liberty is granted to the parties to file documents/papers which were filed before the authorities/Tribunal as per the Delhi High Court Rules. To be shown in the Regular List (Part-A) in the week commencing 23rd March, 2015.
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2014 (12) TMI 1187
Short term capital gain v/s business income - Held that:- The assessee is an investor who has been assessed as investor since A.Y 2000- 01 onwards. We, therefore do not find any reason to deviate from the rule of consistency. We, therefore, do not find any reason in the findings of the Ld. CIT(A) to treat the assessee as an investor where the holding period was less than 7 days. We, accordingly set aside the findings of the Ld. CIT(A) and direct the AO to treat the entire Short Term Capital Gains as such. - Decided in favour of assessee.
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2014 (12) TMI 1186
Waiver of pre-deposit - Valuation - re-imbursement expenses - Manpower Recruitment or Supply Agency services - applicant is not paying service tax on their gross amount received from the service recipient. - Held that:- the applicant is providing service to the client on principal to principal basis. In these circumstances, the applicant is required to pay service tax on the gross amount received for the services provided by them. Further, the applicant has non-informed the value of services provided by it. Therefore, we are of the view that the Department has invoked the extended period of limitation. - prima facie case is against the assessee - 50% stay granted.
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2014 (12) TMI 1185
Additional depreciation on windmill - Held that:- The Hon’ble Madras High Court in the case of CIT vs. Hi Tech Arai Ltd. (2009 (9) TMI 60 - MADRAS HIGH COURT ) has held that where the assessee has set up windmill in addition to some other existing business, and is engaged in the generation of electricity, the assessee is entitled to claim additional depreciation on the same. - Decided in favour of assessee
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2014 (12) TMI 1184
Deduction u/s 80-IB(10) - profits earned from development and building of a housing project, named, ‘Runwal Daffodils’ - Held that:- Assessee had asserted before the Assessing Officer that the PMC was levying municipal taxes in respect of each of the flat in the project and such levies were in the name of the respective owners. The MSEB receipts and possession documents were also furnished to the Assessing Officer. Before the CIT(A) assessee also pointed out that while making application for issuance of completion certificate to PMC, assessee had taken all the necessary steps required to be done before seeking the completion certificate, namely, obtaining of NOCs from various Departments like, Fire Department, Garden Department, Encroachment Department, Construction and Development Control Department, etc.. On this basis, it was sought to be contended that the non-issuance of the completion certificate by the PMC before 31.03.2008 was for reasons beyond the control of the assessee.
We find that all the aforesaid factual assertions made by the assessee have not been controverted either by the Assessing Officer or by the CIT(A).
In the absence of any material to controvert the assertions of the assessee 8 that the construction was completed before the stipulated dated i.e. 31.03.2008, we find no reasons to belie the same. Therefore, on facts, the position consistently canvassed by the assessee to the effect that the construction of the project was complete before the stipulated date of 31.03.2008 has to prevail. We set-aside the order of the CIT(A) and direct the Assessing Officer to allow assessee’s claim for deduction u/s 80-IB(10) in respect of the profits of the housing project, namely, ‘Runwal Daffodils’. - Decided in favour of assessee
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2014 (12) TMI 1183
Unexplained cash credit - CIT(A) deleted the addition - Held that:- The assessee has maintained regular cash book and all its account are audited. The Ld.CIT(A) has analyzed each and every deposits made by the assessee in the bank account from the withdrawals made by the assessee from the bank and the cash available in the cash book. The assessee has also shown sufficient cash in hand in the balance sheet of the earlier years and also the source of cash available with the assessee. Thus, the deposits made by the assessee has been properly explained by the assessee before the Ld.CIT(A) and without there being any contrary evidence or rebuttal by the department, we do not find any reason to deviate from such a the finding recorded by the Ld.CIT(A). Accordingly, the order of the Ld.CIT(A) is affirmed and ground raised by the Revenue is dismissed. - Decided in favour of assessee
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2014 (12) TMI 1182
Reopening of assessment - addition on account of share premium and share application money was made u/s 68 - Held that:- Sufficiency of evidence or material for forming the belief is not open to scrutiny but the existence of belief is must for a valid exercise of power. If it is impossible for any prudent person to form a belief on the basis of material or evidence that the income chargeable to tax has escaped assessment and reason which have been recorded would not lead to a prudent person to form an opinion that the income has escaped assessment within the meaning of section 147 then the action of the Assessing Officer in reopening the assessment u/s 147/148 is contrary to the powers permitted under the said provisions of Act. In the case in hand, the reasons recorded by the Assessing Officer do not indicate even a remote nexus between the application money received by the assessee with the alleged accommodation entries provided by Shri Giriraj Vijayvargiya or the alleged beneficiary of the accommodation entries. Accordingly, in the facts and circumstances of the case, we hold that the reopening in these cases are not valid and consequently the same is quashed. - Decided in favour of assessee.
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2014 (12) TMI 1181
Penalty u/s. 271(1)(c) - unaccounted gifts - Held that:- The assessee has claimed to have received gifts. The payments were received through cheques. The Hon’ble Supreme Court in the case of CIT Vs P. Mohanakala [2007 (5) TMI 192 - SUPREME Court ] has held that transfer of monies through banking channels is not sufficient to hold gifts as genuine. It is also an admitted fact that the donors are not at all related to the donees. In all the proceedings, the main plea of the assessee was that the amount was offered as income to avoid litigation and to purchase peace of mind.
The assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer had recorded a categorical finding that he was satisfied that the assessee had concealed the true particulars of income and was liable for penalty proceedings under section 271 read with section 274 of the Act. There was no illegality in the Department initiating penalty proceedings. - Decided against assessee.
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2014 (12) TMI 1180
Levy of penalty u/s. 271(1)(c) - gifts received - revenue is aggrieved by the deletion of the penalty in respect of Long Term Capital Gains offered by the assessee for tax as income from other sources pursuant to survey action u/s. 133A of the Act - Held that:- The facts in issue are identical to the facts in issue in the case of Mrs. Rashila R Oswal [2014 (12) TMI 1178 - ITAT MUMBAI] for A.Y. 2005- 06. For our detailed reason given in the appeal of Mrs. Rashila R. Oswal and on findings the facts in issues in these appeals to be identical, the appeal filed by the assessee is dismissed and the appeal filed by the Revenue is also dismissed.
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2014 (12) TMI 1179
Rectification of mistake - issue challenging the validity of re-opening of assessment u/s 147 has not been adjudicated by the Tribunal - Held that:- Revenue has not disputed the factual matrix brought out by the applicant that the Ground of Appeal raised by the assessee relating to the validity of re-opening of assessment u/s 147 of the Act has not been adjudicated by the Tribunal.
In view of the aforesaid, we hereby recall the order of the Tribunal dated 30.03.2012 for the limited purpose of adjudicating the Ground of the assessee relating to the validity of re-opening of assessment u/s 147 of the Act, which had not been adjudicated earlier. For the said purpose, the Registry is directed to post the appeals of the assessee before a regular Bench for hearing qua the issue relating to the validity of re-opening of assessment u/s 147 of the Act. - Decided in favour of assessee
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2014 (12) TMI 1178
Penalty u/s 271(1)(c) - Long Term Capital Gain on sale of shares offered by the assessee for tax as ‘Income from other sources” pursuant to a survey action u/s. 133A - Held that:- Held that:- t is an undisputed fact that in the original return of income filed on 12.8.2005, the assessee has returned only ₹ 954,828/-. It is also an undisputed fact that after the survey operation conducted at the premises of the assessee, the assessee agreed for declaring Long Term Capital gains of ₹ 44,83,268/- and ₹ 20,00,000/- on account of gifts received as income from other sources. It is also an undisputed fact that the revised computation of income, the assessee has offered only ₹ 12,00,000/- as gifts and during the course of the assessment proceedings, the assessee further agreed for the addition of ₹ 2,00,000/- out of the balance gift amount. The explanation of the assessee that the amount has been offered to purchase peace of mind and to avoid unnecessary litigation is not a valid reason as per the decision of the Hon’ble Delhi High Court in the case of MAK Data ltd. (2013 (1) TMI 574 - DELHI HIGH COURT ) which has been subsequently confirmed by the Hon’ble Supreme Court [2013 (11) TMI 14 - SUPREME COURT ]. Considering all these facts in totality, we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee.
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2014 (12) TMI 1177
Refund - unjust enrichment - During pendency of the appeal before the Tribunal, the appellant had deposited the Central Excise duty under protest - The appellant was all along contesting the issue of leviability of Central Excise duty on the cost of secondary packing with the Central Excise department. - Held that:- The duty paid on the secondary packing has been accounted for by the appellant under the heading “Loans and Advances” in the Balance Sheet as receivable from the Central Excise department. M/s. Damle Dhandhania & Co., Chartered Accountants, upon verification of the Books of Accounts maintained by the appellant, in their certificate dated 14-8-2009 has also endorsed the said fact.
As held by Hon’ble Rajasthan High Court in the case of UOI v. A.K. Spintex [2008 (11) TMI 89 - RAJASTHAN HIGH COURT] the presumption under Section 12B is a rebuttable presumption and once the assessee produces evidence in support of his claim of having not passed on the incidence of duty whose refund is claimed, to the customers, the burden of proof would shift to the Department to prove that the claim of the assessee is false - Refund allowed.
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